• Federal budget agreement for 2022

Tax and social measures

18 October 2021

Last week, the federal government concluded a new budget agreement for 2022 in post-coronation times. This agreement calls for a balancing act between investments aimed at economic recovery and the search for resources for budget repair. Part of these efforts has already been found in a number of tax measures announced in the coalition agreement when the federal government was formed in 2020 and which have since been implemented. However, new measures appear to be necessary, on the one hand to prevent the budget deficit from continuing to grow, and on the other hand to enable innovation and to achieve the proposed climate objectives.

We list the (para)fiscal measures from the federal budget agreement for you.

 

Budget agreement

 

Social measures

The federal government reached an agreement on the following social measures.

 

Target group reduction

The government has reached an agreement on the target group reduction for the recruitment of the first employee. Today, an employer does not pay any employer contributions to the NSSO for the first employee recruited. This reduction is not limited in time and currently applies irrespective of the level of the employee's salary. From now on, the target group reduction for the first recruitment will be capped at EUR 4,000 per quarter.

 

Night work in e-commerce

The government has not yet reached agreement on the regulation of night work in e-commerce. The e-commerce sector wants more flexible rules for night work in order to compete with competitors in the Netherlands and Germany. In Belgium, night work officially starts at 8 pm, while in the Netherlands this is only at midnight. If companies want to work past 8 pm they must always negotiate with the trade unions and make large concessions in the form of premiums. The opinions of the various government parties were too divided on this issue, as a result of which no agreement has yet been reached on night work. The discussion is therefore being deferred to a group of ministers, the prime minister and the social partners. In the absence of an agreement, pilot projects will be launched.

 

Bottleneck professions

The federal government seeks better cooperation between Flanders, Brussels and Wallonia on bottleneck jobs in our country. There are 70,000 unfilled vacancies in Flanders, while unemployment is much higher in Brussels and Wallonia.

In addition, the long-term unemployed who take up a bottleneck job on the other side of the language border could temporarily combine the salary they receive for this job with their unemployment benefit. This new arrangement ensures that during the first three months after a period of long-term unemployment, the person in question will be able to keep a quarter of his/her unemployment benefit. 

 

Reduction of charges to employees

The burden on employees would be reduced through the work bonus and the reduction of the special contributions on social security (BBSZ).

 

Reintegration of the long-term sick

There would be a penalty for the long-term sick who do not cooperate sufficiently in their reintegration into work.

Long-term sick people who persistently refuse to complete the compulsory questionnaire (about the possibility of returning to work) could then lose 2.5% of their benefit. This arrangement would also apply to long-term sick people who repeatedly refuse to talk to a return-to-work coordinator without a valid reason. This coordinator is a coach who can help the long-term sick to find a job again.

Companies that employ an excessive number of long-term sick people may also be penalised. They will have to pay a 2.5% employer's contribution to a fund that will be used for more prevention. This sanction is only applicable to enterprises with at least 50 employees and to long-term sick persons below the age of 55. This represents a major restriction of the scope of application.

In addition to a penalty for employees and employers, health insurance funds can also lose part of their resources if they fail to get enough people back to work.

 

Abolition of sick note

For the first day of absence from work due to illness, the employee does not have to submit a sick note to his or her employer. There is an exception to this rule for SMEs. They can choose whether or not to require the employee to present a sick note on the first day of absence due to illness.

However, the employee will still have to let his employer know where he is so that a control doctor can be sent if necessary.

Per year, an employee would be allowed up to 3 days of absence without having to present a sick note.

 

Fiscal measures from the budget agreement

 

Restriction of favourable tax regime for professional football players

Top athletes currently benefit from a favourable regime whereby their social security contribution is calculated on a fictitious gross salary of EUR 2,352. Professional football players often earn a lot and so this favourable scheme would be abolished for them.

Brokers, will only be able to deduct their professional expenses from their brokerage commission to a limited extent.

 

Restriction of the favourable regime for expats

The favourable tax regime for expats would be reformed. The intention is to put an end to the administrative arrangement whereby the regime is applied indefinitely (and thus the expatriates are not tax residents anywhere).

 

Flight tax

For flights of less than 500 km from Belgium, a so-called 'boarding tax' or 'flight tax' of 1-2 EUR per flight would be payable.

 

Reduction of tax advantage for diesel in the transport sector

The tax advantage for so-called 'professional diesel' in the transport sector would be phased out.

 

Increased investment deduction for zero-carbon emission trucks and charging infrastructure from 2022

In return, there will be an increased investment deduction for investments in zero-carbon emission trucks and electric charging infrastructure for such trucks, as well as for refuelling infrastructure for hydrogen. An increased deduction of 26% will apply from 2023, decreasing systematically to 13.5% in 2027.

A draft law on the greening of mobility already exists for this purpose.

 

Reform of the system of non-payment of payroll tax

A reform has been announced of the current regime, whereby in certain cases the payroll tax deducted at source does not have to be transferred to the Treasury.

 

Increase in tax deductions for childcare

The tax deduction for childcare is increased from 13 EUR to 14 EUR per day per child. However, this is a measure with a limited impact, since this amount will increase to EUR 13.7 in 2022.

 

Rental of furnished accommodation by private owners now subject to VAT

From now on, lessors of furnished rooms with additional services (e.g. Airbnb) can no longer opt for the VAT exemption for small businesses. This is to prevent unfair competition with the hotel sector.

 

Amicable settlement

The lump sum paid in the context of certain amicable settlements would no longer be tax deductible.

 

Fight against tax fraud

The fight against tax fraud among multinationals will be stepped up, with the aim of ensuring better tax collection.

 

Reform of the VAT regime and excise duties on tobacco

In the coalition agreement of 2020, an increase of the excise tax on tobacco products was already announced for 2022, 2023 and 2024. But now a new legal framework will also be created for tobacco products that do not fall under the current legislation (e.g. e-cigarettes and other new tobacco products)

 

Measures already announced in the 2020 coalition agreement

In addition, a number of measures already introduced in the coalition agreement of 2020 should provide additional resources to contain the budget deficit:

  • The securities tax: has already entered into force this year and should yield € 430 million in 2020.
  • The abolition of tax regularisation: the current system whereby taxpayers can regularise certain non-forfeited income, sums, VAT transactions and fiscally barred capital in order to obtain fiscal and criminal immunity will expire on 31 December 2023.
  • Excise duties on tobacco products: these have already been increased as from 1 January 2021, but additional increases are also planned for 2022, 2023 and 2024.
  • Non-indexation of tax expenditures: In the field of family taxation, the amounts of many tax reductions and exemptions for the period from 2020 to 2023 inclusive are subject to an indexation freeze (i.e. kept at the 2019 level). This applies, among other things, to the exempted first tranche of income from savings deposits, dividends, interest for social purposes, exempted interest in the context of crowdlending, the tax basket for the tax reduction for long-term savings, the tax reduction for gifts, the tax reduction for house staff, the tax reduction for the acquisition of employer shares, etc.

 

Contact

This overview is based on the information that is currently available. We will follow this matter closely and keep you informed.

Do you have any questions regarding these topics? Do not hesitate to contact your usual BDO contact person or send an e-mail to [email protected].