Daily lump sum compensation amounts - Work-related stay abroad of more than 30 days

The tax authorities accept the granting of a daily lump sum tax-exempted compensation in case of a work-related stay abroad of more than 30 days.

The tax authorities recently published a new circular (10 October 2013) to set out the rules applicable to daily lump sum compensation granted in case of a work-related long-term stay abroad.

Until now, only the daily lump sum compensation amounts granted to employees for a short stay abroad, being a maximum of 30 days, were (under certain conditions) considered as a tax-free reimbursement of costs proper to the employer. With regard to the exact amounts that would qualify as such, reference is made to the daily lump sum of category 1, determined per country by Ministerial Decree that applies to the civil servants of the FPS Foreign Affairs.

From now on, the daily lump sum compensation amounts to reimburse costs incurred during a work-related stay of more than 30 consecutive days abroad can also be considered as a tax-free reimbursement if:

• the maximum amount of the compensation is of category 2, applicable to the civil servants working for the FPS Foreign Affairs (lower amount);
• the (same) mission takes more than 30 consecutive calendar days with a maximum of 24 months;
• the granting or payment comes to an end in the event the worker or company leader concerned becomes established abroad.

These new rules take effect immediately.