Partial exemption from payment of withholding tax for shift work: “bis variant”

In order for the employer to benefit from the partial exemption from payment of withholding tax in the case of shift work, the shifts must perform the same work, both in terms of scope and volume. Faced with the difficulties associated with the strict interpretation of the notion of “volume of work”, the government has come up with an alternative, more flexible temporary measure: the bis variant.

Context

The Court of Audit had already pointed out that the absence of a clear definition of the notion of shift work and of the condition relating to "the scope and volume of the activity" would lead to numerous discussions during audits concerning the application of this favourable tax regime for shift work. 

In fact, the law does not specify the criteria to be used to assess the "volume" of the work in order to determine whether the volume of the shift work is the same or not. 

In principle, the volume of the shift work should be measured on the basis of the shift work output. While shift work output is difficult to measure or verify, in most cases the administration can establish the volume on the basis of the composition and the size of the successive teams.

The notion of "the same volume of work" is therefore interpreted mainly on the basis of case law, circulars, parliamentary documents and, where applicable, positions adopted by the FPS Finance. In practice, this condition sometimes gives rise to problems of interpretation.

In a recent ruling, the Constitutional Court held that legislation in this area was not discriminatory for companies where the work volume of shifts is comparable, but not identical. 

In this context, the government has been working on an alternative, temporary (and retroactive) form of the partial exemption from payment of withholding tax for shift work: the "bis variant".

This bis variant exists in parallel with the ordinary partial exemption from payment of withholding tax for shift work. As an employer, you therefore have a choice between the two forms of exemption, either the classic version or the bis variant.

Conditions

The bis variant of the partial exemption from payment of withholding tax for shift work can be applied by companies that carry out shift work meeting the following conditions: 

• The work is carried out in at least two shifts comprising at least two workers;
• The shifts do the same work as far as its scope is concerned;
• The shifts follow one another without interruption during the day. An interruption of up to 15 minutes between successive shifts is not taken into account in this context;
• The overlap between successive shifts does not exceed one quarter of their daily tasks;
• Shift workers receive a shift premium. The shift premium amounts to a minimum of 2% of the gross hourly wage and, as of April 1, 2024, must be included in a CLA, the employment regulations or the employment contract;
• During the month in question, the workers worked at least one third of their working time in shifts;
• The workers are either workers of category Ia as referred to in article 330 of the program law (I) of December 24, 2002, or statutory workers with the autonomous public companies Proximus and bpost, or workers with the public limited company HR Rail.

In the bis variant, the requirement that shifts perform the same volume of work does not apply. 
The exemption from payment of withholding tax for shift work can therefore also be applied to shifts whose work is not identical in terms of volume. However, the amount of the exemption is reduced in proportion to the difference in work volume between the successive shifts. 

Companies operating on a continuous-work system may also benefit from the bis variant, provided they meet the specific conditions for the exemption from payment of withholding tax for continuous work. 

Amount of the exemption

In the bis variant, the amount of the exemption from payment of withholding tax for shift work depends on the difference in work volume between the successive shifts.

The amount of the exemption from payment of withholding tax for shift work (the bis variant bis) is determined on the basis of the following steps:

STEP 1: Calculation of the amount of the exemption from payment of the withholding tax for shift work in the usual way (in the case of partial exemption from payment of the withholding tax for shift work: 22.8% of taxable earnings; in the case of partial exemption from payment of withholding tax for continuous work: 25% of taxable earnings).

STEP 2: For each working day during which shift work is performed during the month, calculation of the difference between the work volume of successive shifts and that of the shift with the smallest work volume, on the one hand, and the total work volume of the successive shifts, on the other hand.

STEP 3: Calculation of the difference in work volume for the month, expressed as a percentage. In this case, the sum of the difference in work volume of successive shifts, established for each working day of the month, is divided by the sum of the work volume of the successive shifts, established for each working day of the month.

STEP 4: Reduction of the amount obtained in step 1 by the percentage obtained in step 3. The result is the amount of the exemption from payment of withholding tax that can be applied.

Example:

In a company, workers are employed in successive shifts.

On day 1, the work volume of successive shifts is 60, 40 and 40.

On day 2, the work volume of successive shifts is 20, 10 and 30.

Step 2:

On day 1, the difference is 20/140, or 14.29%.

On day 2, the difference is 30/60, or 50%.

Step 3:

The difference is 25% (i.e. (20 + 30)/(140 + 60)). 

Step 4:

The amount of withholding tax exemption obtained in the first step must be reduced by 25%.

Entry into force

The bis variant of the partial exemption from payment of withholding tax for shift work may be applied to remunerations paid or awarded from 1 January 2021 to 31 December 2026.

Impact on your business?

Different situations may arise, and it will be up to you to decide whether to apply the classic exemption or the bis variant. 

Our Legal Consultants can assist you in making the right choice and guide you in the implementation of this exemption. You can contact them at legal@partena.be.

Source: Bill of 22 March 2024 on various tax provisions (DOC 55 3865/006)