In this context, a Royal Decree dated 22 August 2020 provided for the modalities based on which the partial exemption can be applied. However, this Royal Decree has been amended recently by another Royal Decree (dated 27 September 2020), to reduce the administrative burden connected to the execution of this partial exemption.

Royal Decree dd. 22 August 2020

According to this Royal Decree employers had to file two payroll tax returns relating to the withheld payroll taxes, i.e. similar set-up as is known for other types of partial exemptions of payment of withheld payroll taxes to the Belgian Treasury:

  1. The first payroll tax return relates to the remuneration paid or attributed to all employees and must include the following specific references:
      • Under box ‘taxable income’: the total taxable remuneration paid or attributed by the employer for the period relating to which the payroll tax return is filed;
      • Under box ‘due withheld payroll taxes’: the effectively withheld payroll taxes (as a reminder: payroll taxes are entirely withheld from the employee’s salary)
  2. The second payroll tax return only relates to the remuneration for which the employer can claim the partial exemption. Various references need to be included in this second payroll tax return (as listed in article 1 of the Royal Decree).

Information to be kept at the disposal of the tax authorities

The following information also is required to be kept available to the tax authorities (amongst which):

  • the full identity (including national number) of each employee;
  • the total amount of taxable remuneration;
  • proof that the employer benefited from the temporary unemployment system for an uninterrupted period of at least 30 calendar days between 12 March 2020 and 31 May 2020, both dates included;
  • etc.

The whole list of information to be kept available is set out in article 2 of the Royal Decree.

Royal Decree dd. 27 September 2020 amending the Royal Decree dd. 22 August 2020

Considering the fact that the Royal Decree only was published in August 2020 whereas the partial exemption was entered into force by law as of June 2020, one can imagine that this retro-active correction and follow-up of withheld payroll taxes was resulting in a bottleneck for the tax authorities.

The government therefore amended the Royal Decree of 22 August 2020 by Royal Decree of 27 September 2020.

This new Royal Decree provides for the possibility to offset the partial exemption from payment of payroll taxes that is applicable for June, July and August 2020 with the payroll taxes due for the months September or October 2020 (in case of a monthly payroll tax return), or with the payroll taxes due for the third quarter of 2020 (in case of a quarterly payroll tax return).

In order to apply this offsetting, tax authorities implemented codes 71, 72 and 73 (respectively for the months June, July and August) to apply in the first payroll tax return whereas a second payroll tax return is to be filed for each respective code (new article 1/1, §1 Royal Decree of 22 August 2020).

The choice to offset this partial exemption is final and irrevocable.

If the partial exemption is not fully used, the exceeding part may be carried forward and offset to the payroll taxes for the following periods (new article 1/1, §2 Royal Decree of 22 August 2020).

Many examples in the new Royal Decree illustrate the application method of this measure in the various cases.