Expenses proper to the employer: modification of the reporting on the tax sheet

The reporting of expenses proper to the employer will be adapted and expanded. The amounts of all types of expense reimbursements must be stated on the tax sheets as from income year 2022.

Types of expenses proper to the employer

Reimbursements of expenses proper to the employer are considered non-taxable allowances if the employer provides dual evidence that the reimbursement is intended to cover expenses incurred by the employer and that such allowance was actually used for such expenses.

The amount can be an allowance that corresponds to the actual expenses incurred or a flat-rate or conventionally determined amount.

We distinguish the following categories of expense reimbursement:

• Reimbursements of expenses proper to the employer that are fixed on a flat-rate basis and on the basis of serious and consistent standards (e.g.: reimbursements of expenses based on flat-rate allowances granted by the government to its employees, expenses for which the amount was fixed after repeated observations and samples);
• Reimbursements of expenses proper to the employer that are fixed on a flat-rate basis, but not on the basis of serious and consistent standards;
• Reimbursements of expenses proper to the employer that are fixed on the basis of supporting documents.

Tax sheets

Expenses proper to the employer granted to the employees are stated on tax sheet 281.10 in the 'Various information' box. For company managers, these expenses are stated on tax sheet 281.20.

The reporting of reimbursements of expenses granted in income year 2021 changes slightly compared to income year 2020. More radical changes are planned starting in income year 2022, including a listing of the amounts for all types of expense reimbursements.

Income year 2020

The tax form 281.10 must contain the following information concerning the expenses proper to the employer:

When combining different categories of expense reimbursements, the entries and/or the amount always appear on the same line.

The tax sheet 281.20 contains similar rules for the reimbursement of expenses granted to company managers.

Income year 2021

The presentation of the different categories of expense reimbursements is slightly modified. When combining different categories of expense reimbursements, the entries and/or the amount do not appear on the same line. For each category, the entry and/or amount will appear on a separate line.

Income year 2022 and following

The obligation to report the costs proper to the employer will be adapted and expanded. For each category of expense reimbursement, the amount will have to be reported and a mandatory reporting will also be introduced for expenses based on supporting documents.

Indication of the amount

Given the importance of the non-taxable reimbursement of costs proper to the employer, the total amount of the reimbursements must always be stated in the "various information" box of tax forms 281.10 and 281.20:

When combining different categories of expense reimbursements, the amount is stated on a separate line for each category of expense reimbursement.

Reporting obligation for costs proper to the employer based on supporting documents

Flat-rate expense reimbursements must be accounted for by individual tax sheets. There was no such formal reporting obligation for expenses reimbursed on the basis of supporting documents.

This changes starting in income year 2022. The reimbursement of expenses established on the basis of supporting documents will have to be mentioned on the tax sheet 281.10 and/or 281.20, irrespective of whether the reimbursement is made through payroll processing or is paid directly to the employee or company manager (outside payroll processing, e.g. a reimbursement through accounting).

Contrary to what applies for fixed expense reimbursements, the non-reporting of expense reimbursements based on supporting documents will not automatically result in their rejection as professional expenses. The violation can however be punished with an administrative fine.

Customer of Partena Professional?

Expense reimbursements that are processed and paid to the employee and/or company manager via the payroll calculations are already included on the tax sheet 281.10 and/or 281.20. For these expense reimbursements (and, if applicable, the corresponding wage codes that you use in the customer tool) you do not need to take any further action, as these reimbursements are already mentioned on the tax sheet.

If you are awarding expense reimbursements based on supporting documents outside of the payroll calculation, please contact your Payroll Consultant to agree further practical details on how to communicate the information on the amounts awarded from 2022. In this way, the delivered tax sheets will comply with the changes in the reporting obligation.

Be prepared!

The indication of the amounts of the expense reimbursements and the reporting of reimbursements based on supporting documents on the tax sheet ensure that the FPS Finance has insight into the granted expense reimbursements. It contributes, inter alia, to checking the possible double use of flat-rate reimbursements and reimbursements on the basis of supporting documents.

It is therefore strongly recommended to scrutinize your company's expenses policy to ensure that the reimbursement of expenses and their amounts are not questioned. Would you like support in evaluating your expenses policy? Or would you like to draw up a company policy on expense reimbursements? Please do not hesitate to contact our Legal Partners at legalpartners@partena.be.

Sources: Act of 27 June 2021 containing various tax provisions and amending the Act of 18 September 2017 on the prevention of money laundering and terrorist financing and limiting the use of cash, Belgian Official Gazette of 30 June 2021; Circular 2021/C/20 on contributions from the employer for telework.