• Reporting obligations for variable
    costs proper to the employer
    extended as from 2022

Reporting obligations for variable costs proper to the employer extended as from 2022

15 December 2021

The law amendment already dates from some time ago, but is now becoming topical again towards the upcoming new year. From 2022, the amounts of reimbursed variable cost allowances must be mentioned for their real amount on the individual tax sheets. This requires additional administrative processing. In addition, the extended reporting requirement will be subject to increased tax audits.


Costs proper to the employer - currently still little reporting obligations

Costs proper to the employer are costs incurred by an employee or company director that are actually a professional expense for the employer/company. Therefore, reimbursements of such costs are generally exempt from social security contributions and payroll tax for the beneficiary (employee/company director) and are tax deductible for the employer.

Currently, there are not that many reporting requirements associated with this.

The employer often grants a fixed cost reimbursement under certain conditions. But the actual cost can also be reimbursed by means of supporting documents (variable cost allowance). This can be processed fairly simply on the tax form by means of the following entries:

  • Fixed reimbursement in accordance with serious standards: 'Yes, serious standards'.
  • Fixed reimbursement not determined on the basis of serious standards: indication of the amount reimbursed
  • Variable expense allowance: ‘Yes, supporting documents’


Extended reporting requirements for variable cost reimbursements...

The law of 27 June 2021 (Belgian Official Gazette 30 June 2021) modifies the existing regulation. As from 1 January 2022, variable cost allowances granted to employees as the reimbursement of actual costs proper to the employer must be justified in the individual tax sheets (281.10/281.20). As a result, variable cost allowances must be entered for their actual value in these tax sheets.

The purpose of the legislator is to further combat the double use of reimbursements of costs proper to the employer and to avoid the unjustified tax deduction as professional expenses.

The extended reporting obligation in the individual tax sheets was already addressed in Circular Letter 2021/C/20 of 26 February 2021 regarding reimbursement of teleworking expenses. This circular already mentioned that for fixed costs proper to the employer, the total amount of the allowance must always be mentioned in the ‘Various information’ section of tax sheet 281.10. The circular adds that this principle will be applied from income year 2022 for all reimbursements of costs proper to the employer and is extended for sheet 281.20.


...also involves a lot of red tape

In practice, however, the enhanced reporting obligation in the individual tax sheets entails considerable additional administrative work. After all, the new obligation relates to actual amounts that are not usually reimbursed via the payroll. The amounts are usually paid out and processed in the accounts after verification. Therefore, in order to draw up the individual tax sheets 281.10 and 281.20 correctly, an actual procedure will have to be put in place to ensure that the information relating to the costs reimbursed by the finance department is actually passed on to the payroll officer, so that it can be entered correctly in the payroll administration.



The new reporting obligation may involve a lot of administrative work, but employers who do not comply with the rules still retain their right to deduct expenses paid for tax purposes. Non-compliance will also not lead to an assessment of secret commissions.

The tax authorities can, however, impose an administrative fine.


Beware of increased tax audits on cost allowances

The explanatory memorandum to the Act of 27 June 2021 already mentioned that the expanded reporting obligation in the individual tax sheets contributes to the audit of possible double use of fixed cost reimbursements and the reimbursement of variable costs on the basis of supporting documents.

In order to avoid discussions with the tax authorities on this subject, we still recommend to apply for an advance ruling with the ruling commission.



Do you have any questions about this topic or would you like assistance with the administrative processing of these new regulations? Then get in touch with one of our payroll experts or your usual BDO contact: