Employment taxes

Social Security Agreement Between Belgium and Quebec Enters into Force

For employment outside of Europe, it must always be verified if Belgium has entered into a social security agreement with the country concerned. The basic principle in most such agreements is that the employee is subject to the social security regime of the 'work country,' but in case of a secondment can temporarily remain subject to the social security regime of the home country. This continued submission to the home country social security regime has to be established in the work country with a "certificate of coverage" provided by the home country.

Continue Reading...

Meal Vouchers in Electronic Form: Soon a Reality!

In the Belgian Gazette of 23 November 2010 two Royal Decrees of 12 October 2010 regulating the introduction of electronic meal vouchers were published.

The first Royal Decree lays down the conditions and procedure for recognizing the "publishers" of meal vouchers in an electronic form.

The second Royal Decree deals with the conditions under which the vouchers are exempt from social security contributions. These contributions will be credited monthly, once or several times, to the "meal vouchers account" of the employee where they will be registered and managed by the authorized publisher. The meal vouchers will have a validity period of three months starting from the moment the contribution has been credited to the employee's account.

Continue Reading...

Legal Entities Acting as a Management Committee Member, Director or Liquidator Can Now Opt to Revise VAT Situation

A legal entity acting as a management committee member, a director or a liquidator is, in principle, liable for VAT. However, due to practical reasons, the VAT Administration does not require such an entity to have a VAT identification.

If a legal entity wants to subject its activities as management committee member, director or liquidator to VAT, it can do so and this choice will affect all its activities performed as such.

This could already be more or less understood from reading Decision ET 79581 of 27 January 1994 but it was recently confirmed in the Decision ET 118.288 of 27 April 2010. The latter decision contains a new provision: even though the VAT Administration decided in the past that such a choice was irrevocable, it now expressly allows its revision. The concerned legal entity, however, has to prove indisputably a thoroughly changed economic situation of the company that justifies the revision of the initial choice. This can be done by means of a motivated letter to the competent local VAT control office and it is such office that takes the decision in this respect.

Instructions from the NSSO for Employers: Table of the Accepted Flat Rates for the Reimbursement of Costs

The instructions for employers that the National Social Security Office (NSSO) has just published for the third quarter of 2010 contain an interesting novelty: the NSSO has inserted a table containing the flat rates which it accepts, under certain conditions, as reimbursement of costs which are for the employer to bear.

In principle, the reality and the exactitude of the costs which are for the employer to bear have to be proved by the employer with the help of supporting documents.

Continue Reading...

Private Use of a Mobile Phone - Still No Flat-Rate Assessment

The benefit a worker derives from his/her private use of a company phone constitutes a remuneration benefit and is subject to social security (NOSS) contributions and tax.

In practice, the question which arises is how can a monetary value be assigned to this benefit?

Continue Reading...

Seniority Bonus: The Tax Administration Follows the NSSO

The tax administration has changed its position on the seniority bonus (Circular of 25 February 2010) having been "inspired" by the instructions of the NSSO (National Social Security Office) (see our Newsflash  (pdf) of 12 March 2009). The changes concern the following elements.

The alternative calculation method to determine the maximum amount of the seniority bonus exempted from social security contributions, as provided by the NSSO, is now also accepted by the tax administration. This means that the seniority premiums awarded from 1 January 2009, are also considered as exempted social advantages, when they are calculated on the average gross amount of a monthly salary in the company.

Continue Reading...
Tags: Bonus

HIRE Act Provides Tax Benefits to Employers that Hire and Retain Unemployed Workers

Incentive Street Sign.jpgOn March 18, 2010, President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act, a measure that provides certain "qualified" employers with limited tax breaks and financial incentives for hiring unemployed workers.  The highlight of this law is a provision exempting certain employers from paying their share of 2010 OASDI (Social Security) taxes on any new hire who has been without full-time employment for at least 60 days.  The maximum tax break an employer could gain per employee under this provision would be $6,621, or 6.2% of total wages paid in 2010 up to the $106,800 FICA wage cap.  This tax "holiday" does not apply to the component of FICA tax covering the Medicare Hospital Insurance (HI) contribution, or other state and federal tax obligations.

Continue Reading...

A Guide to the New Bank Payroll Tax

Lewis Silkin has published a guide (pdf) to the new, one-off 'bank payroll tax' (BPT) that was announced by the Government last month.  The tax is payable at a rate of 50% on bonuses (including deferred bonuses and share awards) paid or awarded by banks and certain other financial institutions in the period between 9 December 2009 and 5 April 2010. (The Government has, however, indicated that this period might be extended.)  BPT is in addition to the income tax and national insurance contributions also payable on bonuses and results in a combined effective tax rate of over 100%.

Continue Reading...

New European Social Security Regulations as of 1 May 2010

On 30 October 2009, the implementing regulation of Regulation (EC) No. 883/2004, that will replace Regulation (EEC) No. 1408/71, was published in the Official Journal of the European Union.

Regulation (EC) No. 883/2004 provides a series of rules to determine which social security regime is applicable in the event of cross-border employment.  The basic principle is that a worker is subject to the social security regime of one Member State, namely the country of employment. Secondment and simultaneous employment are two exceptions to the rule.  For an overview of the most important changes, we refer to our newsletter: 'Expats: the summer of 2009' (pdf).

Continue Reading...

New European Social Security Regulations in Principle as from 1 May 2010

In principle every country has its own social security regime and its own social security rules. To promote internal mobility Regulation (EEC) 1408/71 was introduced. This Regulation doesn't provide a unified European social security regime but rather a series of designation rules to determine which social security is applicable in the event of cross-border employment. The basic principle is that one is subject to the social security regime of one Member State, namely the security of the country of employment. There are two exceptions to this principle:  secondment and  simultaneous employment in various Member States.

Continue Reading...