Partial exemption from payment of payroll taxes (COVID-19 measure) not yet applicable
Following the Bill of June 25, 2020, the new system of (partial) exemption from payment of withheld payroll taxes to the Belgian Treasury has now passed into a Law dated July 15, 2020 (Belgian official Gazette of July 23, 2020).
For more details about this COVID-19 measure, click here.
Money transfers to companies established in a tax haven
As indicated in our previous communication about this topic, one of the conditions was that employers who made money transfers to companies established in a tax haven are excluded from this partial exemption. It now has been specified that only companies that made money transfers of at least EUR 100K are excluded.
What about deferring the balance?
The Bill provided that if, due to other partial exemption measures, the employer cannot apply this COVID-19 partial exemption from payment to the Treasury of withheld payroll taxes , the balance may be deferred to each of the following periods during which payroll taxes are due, but only within the same calendar year.
The law as published does not refer to such a deferral possibility. Hence, it is uncertain at this stage whether this deferral is still possible.
This partial exemption is not yet “applicable”
According to the law as published, the modalities of this partial exemption from payment of withheld payroll taxes to the Belgian Treasury shall be defined by Royal Decree. And although payroll agencies started gathering information for a possible application of this COVID-19 measure, it appears from discussions with the Belgian authorities that the exemption cannot be applied until the publication of said Royal Decree.
We remain available for any questions or assistance in this respect.
Gunther ValkenborgCounsel Attorney at Law
Gunther Valkenborg is counsel to our Brussels office. He is member of the Employment & Benefits Practice group, leads the Compensation & Benefits Team and is a member of the Automotive Team. His main focus is on employment and benefits and international mobility of employees.T: +32 2 743 43 39 E: firstname.lastname@example.org