On 9 May 2011 the 2011 list of daily allowances was published in the Belgian Gazette.  The new rates came into effect on 1 April 2011.
Payments of the daily allowance made by employers to employees who undertake short business trips (business trips lasting no longer than 30 days) are usually accepted, unless they exceed the amounts that the Belgian Federal Government grants to its officers. 
These daily allowances (or “per diem” rates) cover:

• Meal costs
• Minor expenses including local transport, local telephone calls and tips

Travel and hotel expenses are not covered by these daily allowances.

Tax implications

The daily allowances are free of Belgian income tax and Belgian social security contributions (employees and employers part) to the extent the payments do not exceed the amounts in the new list for the period 1 April 2011 to 31 March 2012.

In a circular dated 15 April 2011, the Belgian tax authority confirmed that the daily allowances do not apply to those employees and directors who travel as part of their normal daily professional activity.

If the payments made by the employers exceed the maximum amounts, as set out in the list, the payments can still be made tax free and without any social security contributions if there are supporting documents (that is invoices evidencing the actual amount of the expense and the link with the professional activity are submitted).  Therefore it is important to retain the invoices and other records in order to have the payments tax and social security free.

Resources

Belgian Gazette, publication date 9 May 2011, Ministerial Decree of 28 April 2011 regarding the determination of the lump sum reimbursements in relation to foreign service travel granted to officers of the Federal Government Foreign Services.

For further information or to discuss any of the issues raised, please contact Jean-Louis Davain or Soubiha Ouamari on +32 (2) 743 43 45.