In the context of teleworking, the tax authorities clarified in a circular letter the reimbursement by the employer of office expenses made by the employee and the provision of office furniture/computer equipment by the employer.
This circular letter entered into effect as from 1 March 2021.
1. Scope
This circular letter only applies to employees who work from home. This means the work carried out at the employee's private premises within the framework of normal working days.
This circular letter does not apply to work performed outside normal working hours (e.g. in the evening or at the weekend). Nor does it apply to company managers or employees who fall under special regimes such as foreign executives, salary split situations, etc. For these special regimes, the rule applies that any granting of lump-sum cost reimbursements should be based on serious and consistent standards and should be considered on a case-by-case basis.
2. Fixed office allowance
2.1. General
The fixed office allowance covers all office expenses. The tax authorities are therefore targeting the following costs:
- use of office space at the employee's home (including rent and any depreciation of the space)
- printer and computer equipment (this does not mean the printer and computer themselves, but for example paper, a USB stick, mouse pad, ink, etc.)
- office supplies (folders, course pads, pens, etc.)
- utilities such as water, electricity and heating
- maintenance
- insurance
- property tax
- coffee, water snacks.
These are all costs that have to be incurred in order to carry out the professional activity in a normal way.
2.2. Structural telework
An employer can only grant a fixed office allowance to employees who structurally and regularly perform a substantial part of their working time at home.
This is the equivalent of one working day per week (e.g. one full working day per week, two half working days per week or several days of a few hours worked during normal working hours). This is assessed on a monthly basis.
If the conditions for structural teleworking are not met, the fixed office allowance is not applicable (meaning not even pro rata).
2.3. Amount
The amount of the fixed office allowance is maximum 129.48 euro per month (amount applicable as of 1 April 2020). This amount is not subject to the fiscal indexation rules. The amount of 129.48 EUR may also be paid during normal annual leave. In case of part-time work, the maximum amount does not have to be reduced proportionally (the employer can thus grant the maximum fixed office allowance irrespective of the number of hours of the employment contract). In addition, the employer may differentiate the amount according to the category of staff concerned, provided that there is sufficient justification for a higher cost allowance for specific staff members. It goes without saying that the employer may not contribute to these office expenses in any other way (e.g. by paying part of the electricity costs).
2.4. Temporary increase of the amount
The government has decided to increase the maximum amount of 129.48 euro per month for the months of April, May and June 2021 to a maximum of 144.31 euro per month.
It has been decided to apply this increase also for the months of July, August and September 2021 (circular letter 2021/C/62 dated 1 July 2021).
3. Cumulation of the fixed office allowance with the reimbursement of the purchase price of office furniture/computer equipment
3.1 Which costs?
The tax authorities accept that certain expenses can be reimbursed in addition to the office allowance (as a reimbursement of the employer's own expenses), without these reimbursements having to be deducted from the fixed office allowance. However, the employer should be able to prove the cost on the basis of actual supporting documents and the costs reimbursed should relate to investments that are necessary for the normal performance of the professional activity at home. The latter implies that it should concern costs related to office furniture/computer equipment that the employer provides in normal circumstances at the workplace. More specifically, it concerns the reimbursement of the following items:
- office chair
- desk
- desk cupboard
- functional desk lamp
- a second computer screen
- printer/scanner
- keyboard
- mouse, footmouse, trackpad or trackball
- headphones
- specific equipment that people with disabilities need to work smoothly with the PC.
- The circular letter indicates that this is a restrictive enumeration.
In case of part-time work, the amount of such reimbursements should not be reduced proportionally to the number of hours of the employment contract.
3.2 One-off or staggered reimbursements
The circular letter states that one-off refunds must remain reasonable. This means that it will not be accepted, for example, that the full cost of purchasing an office chair can be refunded every year (when the normal period of use of the office chair is 10 years).
However, the employer is not obliged to make the reimbursement in one instalment. An agreement can be reached with the employee to spread the refund over a number of years, for example the normal period of use of the office chair. The following normal period of use is assumed:
- office chair: 10 years
- desk: 10 years
- desk cupboard: 10 years
- desk lamp: 5 years
- a second computer screen: 3 years
- printer/scanner: 3 years
- other peripheral equipment: 3 years.
If the professional activity or telework is terminated before the normal useful life of the investment has expired and the employee is not required to repay the employer the real residual value (or part of it), then the real residual value of the investment (or the difference between the real residual value and the repayment by the employee) should be subject to tax as a benefit in kind at that time.
4. Cumulation of the office equipment lump-sum allowance with the provision by the employer of office furniture/computer equipment
4.1. Which costs?
Furthermore, the tax authorities accept that certain goods are made available to the employee in addition to the fixed office expenses allowance without this making the provision of goods give rise to a taxable benefit in kind. The fact that goods are made available does not affect the amount of the fixed office allowance as this allowance relates to other expenses.
It concerns the provision of goods that are necessary to carry out the professional activity at home in a normal way, i.e. the provision of the goods listed exhaustively above (3.1.)
4.2. Provision may give rise to a benefit in kind
In certain cases, however, the circular provides for the establishment of a taxable benefit in kind:
With regard to the personal use of a PC, tablet, internet connection, mobile phone or fixed or mobile phone subscription provided free of charge, the provisions of the circular letters of 13 December 2017 and 24 May 2018 on the determination of benefit in kind continue to apply.
The provision of goods that unreasonably exceed the needs of telework (e.g. an expensive designer desk lamp, etc.) does give rise to a taxable benefit in kind. This can be measured by making a comparison with the office furniture/computer equipment that the employer normally makes available its offices. Anything over and above that is intended here.
When the employee is allowed to keep the provided goods after the termination of the professional activity or telework, the real residual value of the investment at that moment has to be taxed as a benefit in kind. This amount may be reduced by the employee's own contribution to the benefit.
5. Fixed allowance for the professional use of a private internet connection and subscription
When the internet (i.e. all equipment related to the connection of the PC to the internet, regardless of the system used: ADSL, VDSL, telephone cable, etc.) is actually used by the employee in the framework of teleworking, the allowance of the employer may be fixed at a maximum of 20 euro per month (this amount is not indexed). In case of part-time work, the maximum amount does not have to be reduced proportionally.
Of course, the employer may not intervene in the same costs in any other way (e.g. when the employer pays part of the Internet subscription).
6. Fixed allowance for professional use of a private computer, second computer screen, printer/scanner
When private computer equipment is actually used by the employee for teleworking, the employer's contribution can be determined on a flat-rate basis. This includes all types of computer equipment, i.e. desktop, laptop and tablet computers, as well as the peripherals and software required for working from home.
The amount of the fixed allowance for the use of the private computer system is a maximum of EUR 20 per month (this amount is not indexed). In case of part-time work, the maximum amount does not have to be reduced proportionally.
However, if only a private second monitor, printer and/or scanner is used for the professional activity (the computer is provided by the employer), the following double limitation applies:
- the fixed allowance is reduced to 5 euro per month per item of computer equipment (own second screen, printer or scanner) and to an absolute maximum of 10 euro per month (several pieces of computer equipment). These amounts are not indexed.
- the fixed allowance can only be granted for a maximum period of 3 years.
- the tax authorities accept the allocation of this fixed allowance on condition that the employer does not contribute to these costs in any other way (e.g. by paying part of the purchase price of the computer or by providing a second screen itself).
7. Change in reporting from income year 2022 onwards
In principle, all indemnities arising from or in connection with the exercise of the professional activity are taxable as employee's remuneration.
When an employer grants a reimbursement to an employee, this reimbursement can only be considered as a non-taxable reimbursement of the employer's own expenses (Article 31, second paragraph, 1°, in fine, ITC 92.), on the condition that the employer provides double proof that the reimbursement:
- is intended to cover costs that are its own; and
- has actually been spent on such costs.
The employer may fix these allowances on a flat-rate basis, without them losing their character of real costs, if their amount is determined according to serious standards resulting from repeated observations and samples.
The fixed allowances that are reimbursements of the employer's own costs must be justified by individual sheets. On the form 281.10 (income 2020), next to section b) of box 27 'miscellaneous information', 'YES - serious standards' should be indicated.
Given the importance of the non-taxable reimbursement of the employer's own expenses in the context of teleworking, from income year 2022 onwards, the total amount of the allowances will always have to be mentioned in the 'miscellaneous information' section of form 281.10, in addition to the information already requested.
This principle will be applied in general terms as of the income year 2022 for all reimbursements of the employer's own expenses and will be extended to form 281.20.
The beneficiaries of the reimbursement of employers' expenses are obliged, in case they prove their actual professional expenses in their income tax return, to deduct this lump-sum reimbursement from their proven professional expenses to the extent that these reimbursements relate to their proven professional expenses.
The employer's own costs awarded on the basis of a fixed allowance may no longer be deducted by the employer on the basis of actual proof.
