Mobile phones and split bill: clarification from the National Social Security Office

When you provide your employees with an IT device (mobile phone, smartphone, computer, internet connection, etc.) which they can use for private purposes, a benefit in kind must be declared to the National Social Security Office (NSSO) and the tax authorities.

These benefits are subject to a fixed-price evaluation (see our Info Flash of 28 February 2018).

The NSSO now clarifies things.

Deduction of personal contribution

The amount of these benefits are reduced by the amount of any personal contribution made by the employee.

How to deduct this personal contribution when the employee has several benefits?

Since the fixed amounts vary depending on the type of benefit made available, we advise you to make sure you specify the type of benefit for which your employee is contributing personally. This contribution may be deducted only from the fixed amount of the benefit concerned. The NSSO does not allow any compensation on the fixed amount of another benefit. The tax authorities take the same position.

Example: you provide your employee with a smartphone (device, mobile phone subscription, internet subscription). He can have unlimited private use of it.

The benefit to be declared will be: € 12/month (€ 3 (device) + € 5 (internet subscription) + € 4 (mobile phone subscription)).

You agree with him that he will contribute € 10/month. This amount can be deducted from the fixed amount for the telephone subscription and not from the fixed amount for the device or for the internet use. The balance of € 6 (€ 10 - € 4) cannot be deducted from the other amounts. The amount to be declared will be € 8 (€ 3 + € 5).

As a general rule, the employee's contribution can be deducted from the fixed amount for the quarter in which the employee pays it. However, the NSSO accepts that one-off contributions (for example, the employee pays a one-off amount when the device is made available) are calculated on the fixed amount for the quarter in which the employee pays his contribution and on the fixed amounts for the following three quarters.

Split bill

As far as mobile phones are concerned, the tax authorities have clarified their position regarding the calculation of this benefit when the employee makes a personal contribution to certain costs linked to this private use via the split bill system (see our Infoflash of 12 June 2018).

The NSSO has just made its point of view known on this subject.  

The principles according to which:

• a benefit must be declared for the provision of IT devices that can be used for private purposes;
• the fixed amounts for these various IT devices must be combined when several benefits are made available (except the internet connection which is only taken into account once)

know one exception: when you set up a system by which the employee pays correctly the use of his telephone for private purposes, no benefit for the telephone subscription (€ 4/month) nor a benefit for the device (€ 3/month) must be declared. It does not matter which system is used (2 sim cards, a system by which the employee indicates with a key that it concerns a private call, a justified fixed amount for the professional use where the employee pays the use exceeding this fixed amount, ...). It also does not matter whether the employee pays his private contribution directly to the provider or to you, the employer. 

On this last point, the NSSO has a broader view than the tax authorities. The tax authorities require, among other things, that employees pay their contribution directly to the provider so that there is no taxable benefit.

Source: Administrative guidelines NSSO 2018/2 Intermediate guidelines.    

Author: Anne Ghysels

16/08/2018