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By a law of 27 June 2021 amending article 57 of the Belgian Income Tax Code, the lawmaker extended the reporting obligation of "costs proper to the employer" (including "representation allowances"). This extension aims at addressing potential abuses relating to costs proper to the employer which have drastically increased since the beginning of the pandemic.
Until 31 December 2021, the reimbursement of "costs proper to the employer" had to be justified on the tax Forms 281.10 (for employees) or 281.20 (for company directors) by mentioning either "YES" OR the amount of the reimbursement, OR both, depending on how the compensation was determined:
- Lump sum basis, based on serious standards: "YES, serious standards";
- Lump sum basis, not based on serious standards: "YES" + amount of the reimbursement;
- Based on expense receipts and supporting documentation: "YES, based on supporting documentation".
As from 2022, the total amount of all reimbursements of "costs proper to the employer" (i.e. lump sum basis whether or not based on "serious standards" as well as effective expenses justified by appropriate supporting documentation) will always have to be mentioned in the tax Forms 281.10 and 281.20. This extension of the reporting requirement includes for example the amount of so-called "representation allowances" paid to the employees/directors.
At the level of the employer, failure to comply with this reporting obligation may be sanctioned by an administrative fine, and, for reimbursements made on a lump sum basis, in the non-deductibility of related costs.
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In case of questions, please do not hesitate to contact the tax team of Fieldfisher.