When a company grants allowances as a reimbursement of subsistence costs to their staff members because they go on domestic and foreign missions, under certain conditions these allowances can be regarded as costs proper to the employer. This implies that these allowances are deductible for the employer who pays them and not taxable for the employee who receives them.
When an employee goes on a foreign mission, he may be entitled to a flat-rate allowance for meals and minor expenses.
In Circular Letters no. Ci.RH.241/534.514 (AOIF 17/2006) dating from 2006.05.11 and no. Ci.RH.241/598.417 (AAFisc 23/2011) dating from 15 April 2011, the tax administration has set out a number of guidelines.
The flat-rate allowances for foreign missions granted by the employer are regarded as costs proper to the employer and therefore they are not liable to taxes provided that they do not exceed the amount of € 37.18 per day. Therefore they can be granted without supporting documents.
If the daily flat-rate allowances exceed € 37.18, they are still accepted as a reimbursement proper to the employer provided that the circumstances, typical of the country in which the mission is carried out, justify them.
The FPS Finance accepts that the daily flat-rate subsistence allowances which the officials of the FPS Foreign Affairs receive when they are sent on a foreign mission are laid down according to serious standards (the so-called 'list of countries'). The flat-rate allowances, granted by the employer, constitute a reimbursement of costs proper to the employer, the amount of which does not have to be justified if it does not exceed the amounts included in the 'list of countries'.
Therefore, the FPS Finances accepts above 'daily flat-rate subsistence allowances' without supporting documents, provided that the flat-rate amount of € 37.18 can still be applied.
If a mission is carried out in a country where different daily allowances apply or in different countries, the daily allowance of the place of the overnight subsistence will define the rate of the following 24 hours.
The daily allowances are deemed to cover the expenses during a foreign mission incurred for meals and minor expenses.
Minor expenses are understood to mean the local transport in the country of destination (such as tram, bus, underground, taxi), beverages, snacks, local phone calls and tips. Hotel and other travel expenses are not included in this.
If the overnight subsistence expenses are reimbursed or borne by the employer or company and they also comprise certain meals or minor expenses, the flat-rate daily allowances which can be taken into account as costs proper to the employer or the company not liable to taxes must be reduced:
- by 15 % of the daily flat-rate daily allowance, for breakfast;
- by 35 % of the daily flat-rate daily allowance, for lunch;
- by 45 % of the daily flat-rate daily allowance, for dinner;
- by 5 % of the daily flat-rate daily allowance, for minor expenses.
The guidelines set out in the circular letter apply to the taxable persons who receive remunerations as employees or company managers for whom travelling abroad and back does not form part of their daily normal professional activity.
The daily flat-rate subsistence allowances can not be the norm for self-employed persons who must justify the authenticity and the amount of the incurred expenses during foreign missions by supporting documents.
Foreign mission is understood to mean a short-term assignment abroad on active service or on behalf of the employer or the company in which the employee or the company manager works. Short-term is understood to mean a mission of maximum 30 calendar days.
Once the period of 30 days has been exceeded, only the expenses justified by supporting documents are taken into account as costs proper to the employer.
The amount of the subsistence allowance stated in the 'list of countries' are flat-rate daily allowances.
The full amount can be taken into account for each full day of absence, this is a day between 2 overnight stays during a mission.
For the days of departure and return, only half of the flat-rate allowance can be taken into account as costs proper to the employer.
The full amount may also be granted for missions with a departure and return within the same twenty-four hours' period with an absence of at least 10 hours. To ascertain whether this is the case, the absence of the employee or the company manager from his fixed place of work (work location) until the hours of return to that place must be taken into account.
If the absence is less than 10 hours, only the reimbursement on the basis of the expenses that are justified by presenting supporting documents are taken into consideration for costs proper to the employer. We may assume that the amount of the granted daily allowance is not liable to taxes if the amount does not exceed the similar allowances which the State grants to its staff members (the so-called missions in Belgium).
The Moniteur Belge of 27 March 2014 has published the Ministerial 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.
Auteur: Peggy Criel