Tax reduction in the case of shift work: now also applicable for construction works

Employers employing employees who perform construction works benefit from a new aid measure in the form of a wage withholding tax exemption for shift work. In order to qualify for the measure, employers must meet several conditions.

For which employers?

Are concerned, the enterprises in which the employees carry out construction work and in which shift work is carried out in accordance with a specific definition. In addition, employers are required to pay or award a shift bonus. A gross hourly wage of at least €13.75 is equivalent to a shift bonus.

Enterprises where shift work is carried out

In the context of this specific measure, 'enterprises where shift work is carried out' are enterprises where:

• The work is carried out in one or more shifts;
• The shifts consist of at least two people;
• The shifts perform the same or complementary work as regards the content as well as the volume;
• The shifts carry out their work on site, i.e. on the workplace;
• The shifts perform construction work as explained below.

Enterprises that are recognised for temporary agency work and that post temporary agency workers to the enterprises above are, for the purposes of this measure, assimilated to 'enterprises where shift work is performed'.

Construction works

The eligible works are the works meant in article 20, §2 of the Royal Decree no. 1 of 29 December 1992 on the regime for the payment of value-added tax.

Essentially, it covers all works relating to building, renovating, finishing, fitting-out, repairing, maintaining, cleaning and dismantling, in whole or in part, of immovable property, and the act of supplying movable property an installing it in such a way on an immovable property so that its nature becomes immovable.

The following acts are concerned as well:

1. Any act that has as its object both the delivery and the insertion into a building of:

• shutters, roller shutters and roller blinds installed on the outside of the building;
• storage cabinets, sinks, sink units and furniture with built-in sinks, washbasins and furniture with built-in washbasins, extraction hoods, fans and air extractors with which a kitchen or bathroom is equipped;
• the components or part of the components of an electrical bell system, of fire alarms, of anti-theft alarms and of a home telephone;
• the components or part of the components of an electrical installation of a building, with the exception of appliances for lighting and lamps;
• the components of or part of a sanitary installation of a building and, more generally, of all fixed appliances for sanitary or hygienic use connected to a water main or a drain;
• the components or part of the components of a central heating or air conditioning system, including the burners, tanks and regulating and control devices associated with the boilers or radiators;

2. any act that has as its object both the delivery of flooring and its installation in a building, regardless of whether this flooring or covering is attached to the building or is simply cut to size on site in accordance with the dimensions of the area to be covered;

3. any work consisting of attaching, fitting, repairing, maintaining and cleaning goods referred to in 1. or 2. above.

The provision of staff to carry out construction work or acts such as those described above is also envisaged.

How much is the wage withholding tax exemption?

The exemption equals a percentage of the sum of all taxable remunerations of all the employees concerned:

‘Taxable remunerations' are the wages, shift premiums, benefits in kind with the exclusion of:

• premiums, other than shift work premiums;
• the holiday pay;
• the end-of-year bonus;
• arrears of remuneration.

Do not qualify either: payments received by virtue of or as a result of the termination or ending of the employment contract and payments received for the full or partial restoration of a temporary loss of remuneration.

Effective date

The new measure was published in the Belgian Official Gazette of 30 March 2018 and applies to remunerations paid or granted as from 1 January 2018. In order to apply the measure in practice, we have asked the FPS Finance for additional clarifications.

Sources: Law of 26 March 2018 on improvement of economic growth and social cohesion, Belgian Official Gazette 30 March 2018, Circular 2018/C/73 of 11 June 2018 on the withholding tax exemption for shift work - introduction of a specific measure for construction work.