The programme law of 23 December 2009 looks to turn around the burden of proof procedure – as far as social security is concerned – of lump sum cost allowances.
Previous regulation
The refund of expenses claimed by an employee within the framework of his employment contract does not qualify as salary and is thus not subject to social security contributions. The employer has the choice to refund professional expenses either on basis of receipts or via a lump sum allowance. The latter option can only be used if the lump sum allowance is in reasonable proportion to the actual professional costs. Flat-rate refunds are usually applied in order to simplify the administrative procedure and also because not all expenses can be reported by receipts.
Although the National Office for Social Security (NOSS) kept insisting that the employer had to prove that the lump sum allowances were reasonable and constituted the refund of actual costs, the Supreme Court stated repeatedly and explicitly that the NOSS bore the burden of proof of the wage nature of these allowances.
The programme law
The programme law introduces– in view of facilitating the provision of proof regarding the refund of professional expenses – a reversal of the burden of proof in favour of the NOSS.
The reversal of the burden of proof is inspired by the existing tax regulation according to which the employer bears a double burden of proof: the employer must prove the professional nature of the expenses as well as their accuracy.
The reversal of the burden of proof introduces a similar regulation in the field of social security with the difference that – contrary to the rules applied to the fiscal administration – it is impossible to reach a preliminary ruling with the NOSS regarding the amount of the lump sum allowances awarded to the employees.
Thus, in the future, the employer will also have to prove the professional nature and the accuracy of the lump sum refunded costs. The employer can deliver this proof by any legal means, except for the formal declaration before the court.
Preparing a strong case with the necessary evidence will become a necessity in order to avoid the requalification of (a part of) the lump sum allowances into salary – with all consequences involved. A viable method for the employer to use would be to keep, for example, all cost receipts over a period of 3 months, to be used as a basis upon which a reasonable average can later be determined as lump sum cost allowance.
This new regulation entered into force on 1 January 2010.
