Extra training provides a tax benefit from 2021 onwards

Author: Peggy Criel (Legal Expert)

Employers will be entitled to a new tax benefit from 2021 onwards if their employees follow more training courses than provided by law. In this way, the government wants to encourage employers to provide more training for their employees.

The tax aid is granted in the form of a partial exemption from withholding tax. The measure is included in a draft law and is not yet adopted.

We already sketch this new support measure in broad outlines.

When can the employer benefit from the support?

Firstly, the employer must be subject to the Collective Labour Agreement Act of 5 December 1968.

Moreover, the tax benefit is only granted for employees:

  • who have been employed with the employer for at least 6 months; and
  • who have received training for at least 10 days in the course of an uninterrupted period of 30 calendar days.

The minimum duration of 10 days and/or the uninterrupted period of 30 calendar days can be deviated from:

  • for SMEs, the minimum number of training days shall be 5 days in the course of an uninterrupted period of 75 calendar days;
  • for companies with shift and night work systems, the minimum number of training days shall be 10 days in the course of an uninterrupted period of 60 calendar days;
  • in the case of part-time workers, the minimum number of training days shall be reduced in proportion to the work scheme applicable to the employee concerned.

The number of uninterrupted periods of 30, 60 or 75 calendar days is limited to 10 periods for the same employee with the same employer.

Which training courses are eligible?

Both formal and informal training courses are eligible. However, these training courses must constitute a professional expense for the employer.

In addition, the informal training must not be more than:

  • 10 % of the minimum duration of 10 days; or
  • 20 % of the minimum duration of 5 days.

Training courses already made compulsory by a statutory, regulatory provision or by a collective bargaining agreement are not eligible for this measure.

Amount of the tax benefit for the employer

The tax aid is granted in the form of a partial exemption from withholding tax.

The exemption amounts to 11,75 % of part of the remuneration. Ordinary monthly wages, premiums, benefits in kind are included. Severance pays, double holiday pay, end-of-year bonus and arrears are excluded, among other things, as is the remuneration of company managers.

Moreover, the taxable remuneration that is taken into account only amounts to EUR 3,500 per employee.

If the training is spread over two months, only the remuneration of the month in which the training is completed shall be taken into account for the calculation of the exemption.

Figure example

An employer employs employee A who has been employed full-time by this employer for more than 5 years. In April 2021, employee A follows a 10-day training which is is eligible for the measure.

Consequently, the employer may benefit from an exemption from withholding tax calculated and applied as follows:

April 2021

Employee A:

Taxable monthly salary

EUR 2,500.00

Retained withholding tax

EUR 600.00

Part of the withholding tax which does not have to be paid (EUR 2,500 x 11.75 %)

EUR 293.75

Withholding tax to be paid

EUR 306.25

As a result of the exemption, the employer only has to pay EUR 306.25 in withholding tax for employee A instead of EUR 600. So the employer is granted a tax benefit of EUR 293.75.

Entry into force

In principle, the new tax support measure will enter into force on 1 January 2021.

However, note that the measure is included in a draft law. We follow the measure closely and inform you as soon as there are any changes.

Source: Draft programme law, Parliamentary Documents, Chamber 2020-21, No. 1662.

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