Tax exemption for social liabilities

The legislation with regard to the unified status introduces a new tax exemption for the benefit of employers. They can exempt part of their profit or gains from taxes. The conditions for implementing this measure are  stipulated in two Royal Decrees which have recently been published in the Moniteur Belge.

Due to the introduction of the unified status, the dismissal cost for a worker after 5 years of service in the unified status has increased in some cases compared to the dismissal cost in case of an identical length of service in the former scheme. It more particularly regards workers who were manual workers or junior non-manual workers in the former scheme.

To absorb the higher cost, a tax exemption for social liabilities has been introduced for the benefit of trading, industrial or agricultural enterprises, practitioners of independent professions, offices or posts, and of another commercial activity, including companies. These taxpayers can exempt part of their profit or gains from taxes. This exemption is equal to a certain amount of the income that they have granted to workers who have worked under the unified status for minimum 5 years of service. Therefore, the exemption cannot be granted earlier than 1 January 2019.  

As far as the worker is concerned, he does not benefit from any tax advantage within the framework of the social liabilities measure.

The amount to be exempted from profit or gains amounts to:

• 3 weeks' remuneration per started year of service as from 5 years of service under the unified status;
• 1 week's remuneration per additional started year of service as from 20 years of service under the unified status;

By Royal Decree of 25 April 2014, the maximum amount of the gross monthly remuneration which serves as a basis for the exemption has been fixed:

The maximum amount of the gross monthly remuneration and the 30 % coefficient may be amended in the future (taking into account amongst others the health index and the evolution of the wages). 

When a worker, for whom an exemption was calculated, leaves the company (for whatever reason), the total amount which has been exempted for this worker must be included in the profit or gains of the taxable period in which the employment comes to an end.

To benefit from the social liabilities exemption, the employer must keep a list of names of the employed workers available for the administration, stating for every worker:

• the full identity as well as the national number if such is the case;
• the employment start date;
• the length of service acquired under the unified status;
• the gross taxable remuneration paid or granted to the worker including the worker's social security contributions, to be limited to the aforementioned maximum amount of the gross monthly remuneration where appropriate.

Since the exemption only starts after 5 years of service under the unified status, the measure will only take effect as from 2019.

Sources: Royal Decree of 25 April 2014 amending the Royal Decree for the implementation of the 'Code des impôts sur les revenus 1992' relating to the determination of the maximum amount of the exemption as regards social liabilities, pursuant to the unified status, Moniteur Belge, 14 May 2014; Royal Decree of 25 April 2014 amending the Royal Decree for the implementation of the 'Code des impôts sur les revenus 1992' relating to the conditions for implementing the social liabilities pursuant to the unified status, Moniteur Belge, 14 May 2014.

Auteur: Peggy Criel

30/05/2014