In the Circular Letter daring from 10 October 2013, the tax administration has established that under certain conditions the costs incurred by an employee (or company manager) during a work-related business trip abroad of more than 30 days can be reimbursed in the form of a daily flat-rate subsistence allowance (not liable to taxes). The amounts of these daily flat-rate allowances applicable as from 1 April 2014 have been published recently.
The tax administration accepts that for a work-related business trip abroad of more than 30 days, daily flat-rate allowances can be granted as a reimbursement of costs incurred by the employee (or the company manager) and that these can be exempt from taxes.
This system only applies to persons who receive remunerations as an employee or a company manager.
The daily flat-rate subsistence allowances granted as a reimbursement of costs incurred by the employee (or the company manager) during a business trip abroad of more than 30 consecutive calendar days are regarded as costs proper to the employer provided that:
- the maximum amount of these daily flat-rate subsistence allowances does not exceed the daily flat-rate subsistence allowances established per country for the officials "posted" abroad (see list of countries) of the FPS Foreign Affairs, on the understanding that the amount € 37.18[i] can still be applied. If the daily flat-rate subsistence allowances exceed the amounts stated on this list, they have to be regarded as remunerations liable to taxes[ii];
- the granting or payment of these flat-rate allowances for the same mission is limited to a maximum of 24 months;
- the granting or payment is interrupted should the employee (or company manager) settle definitively abroad.
The business trip abroad must be long-term, this implies more than 30 consecutive calender days (but with a maximum of 24 months) for the same mission for professional purposes. The subsistence period voluntarily extended by the employee (or company manager) is not taken into account for the calculation of those 30 days.
The amount of the daily flat-rate subsistence allowances is deemed to cover the expenses for meals and minor expenses.
Minor expenses are understood to mean the local transport in the country of destination (such as bus, tram, underground, taxi), beverages, snacks, local phone calls and tips.
The allowances neither cover the subsistence costs nor the travel expenses to other countries and back.
If the overnight subsistence expenses are reimbursed or borne by the employer and they also comprise certain meals or minor expenses, the daily flat-rate subsistence allowances must be reduced by:
- 15% for breakfast;
- 35% for lunch;
- 45 % for dinner;
- 5% for minor expenses.
The full amount of the daily flat-rate subsistence allowance can be regarded as a non-taxable reimbursement of costs for each full day of absence (this is a day between two overnight stays during a mission abroad).
For the days of departure and return of a business trip abroad, the amount of the daily flat-rate subsistence allowance must be divided by two. The above reductions in the form of a % will not be applied.
- If the mission abroad takes place in several countries, the amount of the daily flat-rate subsistence allowances in connection with the location of the last overnight subsistence will be determining for the following twenty-four hours' period.
- If the employer grants luncheon vouchers to reimburse the meal expenses during the subsistence abroad, the employer's contribution to the luncheon voucher (maximum € 5.91/luncheon voucher) must be reduced from the flat-rate subsistence allowance.
- The employer cannot combine the granting of the daily flat-rate subsistence allowances with a reimbursement of meal expenses and minor expenses based on supporting documents.
- The daily flat-rate subsistence allowances cannot be combined with the benefit granted to Belgian employees who are employed in a country outside Europe with which Belgium has not concluded a double tax convention. That benefit consists of a 30% deduction of professional expenses.
The Moniteur Belge of 27 March 2014 has published the Royal Decree of 13 March 2014 establishing the subsidence allowances granted to delegates and officials subordinate to the Federal Public Service of Foreign Affairs, Foreign Trade and development cooperation who go abroad or reside in international commissions with an official mandate and a complete list of countries containing the flat-rate allowances that apply as from 1 April 2014.
You can consult the list of countries with the flat-rate daily allowances (category 2) through this link.
Source: circular letter no. Ci.RH.241/609.972 (AAFisc Nr.38/2013) dating form 2013.10.10.
[i] The flat-rate allowances granted by the employer for foreign missions are regarded as reimbursements of costs proper to the employer and therefore are not liable to taxes if they do not exceed € 37.18 per day. In that case they can be granted without supporting documents. Yet, if these allowances exceed € 37.18 per day, they can still be regarded as a reimbursement proper to the employer provided that the circumstances, typical of the country in which the mission is carried out, justify them.
[ii] However, the granting of a higher subsistence allowance which is not liable to taxes is still possible provided that the employer presents double proof that:
- The allowance is intended for covering costs proper to him;
- That allowance is actually spent on such costs.
Auteur: Peggy Criel