Professional use of a private Internet connection and subscription: what compensation?

When an employee uses his private Internet connection and subscription in order to be able to work from home, the employer can pay the employee a flat-rate compensation. What conditions must be met for this compensation to be considered a non-taxable reimbursement of expenses?

General

In principle, all allowances received as a result of or in connection with the professional activity are taxable as remuneration. However, an allowance may be considered as a non-taxable reimbursement of the employer's own expenses if the employer can prove that the allowance is intended to cover expenses that are specific to him and the allowance is actually spent on such expenses.

The employer may determine these allowances on a flat-rate basis, without them losing their nature of actual expenses, where their amount has been established in according with serious standards resulting from repeated observation and sampling.

The circular of 26 February 2021 on employer’s compensations for homework clarifies the income tax consequences of such compensations for employees.

What do we mean by homework?

Homework means any form of organisation and/or performance of work under which work that could also be carried out in the employer's workplace is regularly carried out outside that workplace.

The notion of 'workplace' is to be understood in a broad sense, encompassing the activities of employees that are normally carried out at the customer's premises or at another location (e.g. at a satellite office of the employer, i.e. a decentralised room of the employer or a room that the employer puts at the disposal of the employee).

Homework must therefore be carried out in the employee's private premises. Work performed in a satellite office of the employer is not homework. A satellite office is considered to be part of the employer's workplace.

The circular refers to homework as part of normal working hours and therefore does not regulate the issue of employees working at home outside normal working hours (e.g. in the evening or at the weekend).

Private Internet

By “internet connection” we mean all the equipment relating to the connection of the PC to the Internet, whatever the system used (telephone cable, ADSL, VDSL, etc.).

By 'internet subscription' we mean the provision of access to the Internet by a 'provider'.

What amount?

When the Internet is actually used by the employee in the framework of homeworking, the compensation of the employer can be determined on a flat-rate basis but it shall not exceed 20 euros per month.

In the case of part-time work, the maximum amount need not be reduced proportionally.

The tax administration accepts the granting of this flat-rate amount provided that the employer does not contribute to the costs of the private Internet connection and subscription in any other way (e.g. by taking charge of part of the invoice for the internet subscription).

Accumulation with other flat-rate compensations

On top of the compensation of maximum 20 euros per month for the professional use of a private Internet connection and subscription, the employer may grant the following flat-rate compensations:

• The flat-rate office allowance of 129.48 euros per month (144.31 euros for the second quarter 2021), and
• An allowance of up to 20 euros per month for the professional use of a private computer with peripherals or an allowance of up to 10 euros per month (5 euros per item) for the professional use of a private second computer display or a printer/scanner without a private computer.

Exclusions

The scheme described in this circular cannot be applied to company managers or employees who fall under special regimes such as, for example, foreign executives, salary split for employees who work in different countries for the same employer, etc.

And in terms of social security?

The NSSO has decided to follow the tax circular with regard to reimbursements within the framework of expenses related to homeworking.

Entry into force

The circular came into effect on 1 March 2021, but the administration will apply its principles for all homework situations that have occurred since 1 January 1 2020.

The circular does not affect the rulings in force.

If you have any legal questions about employer compensation for homework its application, be sure to contact our legal consultants at legalpartners@partena.be.

Sources: Circular 2021/C/20 on employers' compensations for homework, https://eservices.minfin.fgov.be/myminfin-web/pages/fisconet#!/document/9ab46041-d0bf-4438-b707-e7b847c4794c26 February 2021; NSSO Instructions (4 March 2021): https://www.socialsecurity.be/employer/instructions/dmfa/fr/latest/intermediates