Due to the Covid-19 pandemic, most employees have worked from home for a large number of days from March 2020 onwards. As the taxation of salaries and the applicable social security legislation is linked to the location where the work is carried out, this increase of telework may have an important impact on the tax position and on the applicable social security regime for employees who are normally internationally active.
There are no general exception measures in place. Hence, for a lot of internationally active employees, Covid-19 telework will impact the taxation of their salaries. This is however different for employees who normally work in Belgium’s neighboring countries, as Belgium has concluded agreements with Germany, France, Luxemburg and the Netherlands to mitigate the impact of Covid-19 telework.
These agreements introduce a fiction according to which homeworking days due to the Covid-19 pandemic of Belgian employees who normally work in Germany, France, Luxembourg or the Netherlands, or vice versa, are considered to have been spent in the country where they would have normally worked without the Covid-19 pandemic. For more information, we refer to our earlier newsflash.
This fiction is effective as of mid-March 2020 and would normally end on 30 June 2021. The agreements have now been extended for a fifth time (on 11 June for Luxemburg, on 15 June for France, on 16 June for Germany and on 21 June for the Netherlands). The fiction will remain in force until 30 September 202, but could be further extended.
The Belgian social security administration has introduced a similar measure and announced that the increased telework due to the coronavirus will not be taken into account in determining the applicable social security legislation for persons who normally work in the EEA or Switzerland. This measure applies both for employees and for self-employed persons.
This tolerance applies as from 13 March 2020 and would normally end on 30 June 2021. The administration has now announced that this measure will continue to apply until 31 December 2021 (subject to possible further extensions).
We refer to our earlier newsflash for more information.
Katrien Bollen – Senior Associate (firstname.lastname@example.org)
Mona Vera – Associate (email@example.com)
Tiberghien’s international tax team will continue to monitor these and other tax developments relevant for Belgium / Luxembourg based multinational enterprises. Our editorial board consists of:
- Koen Morbée (International and EU corporate tax, firstname.lastname@example.org);
- Michiel Boeren (International and EU corporate tax, email@example.com);
- Katrien Bollen (HR tax and global mobility, firstname.lastname@example.org);
- Ben Plessers (Transfer Pricing and Valuations, email@example.com);
- Gert Vranckx (VAT, customs, excises and other indirect taxes, firstname.lastname@example.org);
- Rik Smet (International and EU corporate tax, email@example.com).
In case you have further questions on this publication or want to discuss a tax query, please do not hesitate to contact the author(s) or one of the members of the editorial board.
This newsflash is for information purposes only and cannot be relied upon as legal advice.