CORONA BUSINESS SUPPORT MEASURES

Natalie Bastiaens, Partner |
Jean Santin, Senior Manager |
Stijn Rasschaert, Partner |
Jan Oosterlinck, Partner |

06 July 2022

Businesses experiencing financial difficulties due to the COVID-19 outbreak can apply for various social security and tax support measures. We will be happy to provide you with an overview.

FEDERAL BUSINESS SUPPORT MEASURES

SOCIAL LEGAL MEASURES

GENERAL TAX MEASURES

INCOME TAX MEASURES

 

INDIRECT TAX MEASURES

The regional governements (Flanders, Walloon and Brussels region) have also issued a range of local business support measures. You will find them on the Dutch/French page of this news article. Upon request, we will be pleased to provide more information in English.

 

FEDERAL MEASURES

SOCIAL LEGAL MEASURES

Social security contributions for the self-employed: reduction or exemption

What?

  • Reduction
    • For all self-employed persons (main profession, secondary profession)
    • Reduction of provisional social contributions for the year 2022 (calculated on the 2019 professional income) if their estimated professional income for the year 2022 is less than their income for 2019
    • Reduction applies if professional income is below the legal thresholds
    • Level of reduction to be determined freely by the self-employed person according to the estimated income
  • Exemption:
    • For self-employed persons in their main occupation and their assisting spouse (including starters who have been active for 4 consecutive quarters)
    • May be granted in whole or in part
    • May be requested for provisional contributions of all quarters of 2022 and for the contribution supplement after regularisation of the professional income
    • No accrual of pension rights for the quarters for which there is an exemption. This can be regularised later (within 5 years) so that quarters are still eligible for the pension calculation
    • For self-employed persons who are still active in a sector that is compulsorily closed or who are severely affected because of a large loss of turnover due to the corona measures, a simplified application form can be used, but only for exemption from payment of the social security contributions of Q1/2022 and the regularisation contributions of 2018, 2019, 2020 that expire on 31 March 2022.

 

How to apply?

  • Application to be submitted to social insurance fund
  • Reduction
    • Application to be submitted to social insurance fund
  • Exemption
    • Via social insurance fund or online application: Dutch French  
    • Recommended to sign up via email: [email protected]
    • 02/546 60 19
    • Recommended to contact social insurance fund to make application
    • Within the 12 months following the end of the quarter concerned

Information source: Dutch / French

 

Bridging right for the self-employed in case of quarantine or child care

For whom?

  • Full benefit for:
    • Self-employed persons in their main occupation (including helpers, assisting spouses in maxi-status)
    • Self-employed persons in a secondary occupation who are subject to provisional contributions at least equal to the minimum contributions for self-employed persons in their main occupation
    • Self-employed persons in their main occupation equated with a secondary occupation (art. 37 ARS) who owe provisional social security contributions that are at least equal to the minimum contribution of self-employed persons in their main occupation
    • Student self-employed persons who owe provisional social security contributions that are at least equal to the minimum contribution of the self-employed persons in their main occupation
    • Self-employed persons after retirement age without pension or only the unconditional pension who owe provisional social security contributions at least equal to the minimum contribution of the self-employed in main profession
  • Partial benefit for:
    • Self-employed persons in a secondary occupation who owe provisional social security contributions calculated on a reference income between EUR 7,329.22 and EUR 14,658.44
    • Self-employed persons with a main occupation assimilated to a secondary occupation (art. 37 ARS) who are subject to provisional social security contributions calculated on a reference income between EUR 7,329.22 and EUR 7,678.69
    • Student self-employed persons who owe provisional social security contributions calculated on a reference income of between EUR 7,329.22 and EUR 14,658.44
    • Active retired self-employed persons who owe provisional social security contributions calculated on a reference income higher than EUR 7,329.22
  • Requirement: the self-employed person owes social security contributions in Belgium
  • For self-employed persons who are placed in quarantine and who must therefore effectively and completely interrupt their self-employed activity for at least 7 consecutive calendar days. Self-employed persons who can organise their activity from home are not eligible. This situation of force majeure must be demonstrated by means of a quarantine certificate (in their own name or in the name of a person registered at the same address as the self-employed person)
  • Self-employed persons who have to interrupt their self-employed activity completely for at least 7 consecutive calendar days because they have to take care of their child(ren) up to a maximum of 18 years, because the class has to be quarantined or the school/childcare centre has to be closed, because the child is in quarantine or because the child has to attend classes remotely as a result of the corona .This situation of force majeure must be demonstrated by means of a supporting document (decision of the management of the school or decision of the childcare centre)
  • In case of a full benefit, from 1.01.2022 the financial support amounts to a maximum of EUR 1,370.75 without family burden and EUR 1,712.90 with family burden for a duration of at least 28 days. This financial support decreases depending on whether the duration of the quarantine is between 28 and at least 7 days
  • The benefit is granted for the months of January 2021 up to and including March 2022
  • The Council of Ministers decided on 1 April 2022 to extend these measures until 30/06/2022.


 How to apply?

  • Application to the social insurance fund, which will provide the application form
  • Application for the months of January, February and March 2022 possible until 30.09.2022
  • Application for the months April, May and June 2022 possible until 31/12/2022
  • More information on the website of Social Security Self-Employed Entrepreneurs (Dutch / French).

 

Double COVID-19 bridging right for the self-employed: January 2022 to March 2022

For whom?

  • Full benefit for:
    • Self-employed persons in their main occupation (including helpers, assisting spouses in maxi-status)
    • Self-employed persons in a secondary occupation who are subject to provisional contributions at least equal to the minimum contributions for self-employed persons in their main occupation
    • Self-employed persons in their main occupation equated with a secondary occupation (art. 37 ARS) who owe provisional social security contributions that are at least equal to the minimum contribution of self-employed persons in their main occupation
    • Student self-employed persons who owe provisional social security contributions that are at least equal to the minimum contribution of the self-employed persons in their main occupation
    • Self-employed persons after retirement age without pension or only the unconditional pension who owe provisional social security contributions at least equal to the minimum contribution of the self-employed in main profession
  • Partial benefit for:
    • Self-employed persons in a secondary occupation who owe provisional social security contributions calculated on a reference income between EUR 7,329.22 and EUR 14,658.44
    • Self-employed persons with a main occupation assimilated to a secondary occupation (art. 37 ARS) who are subject to provisional social security contributions calculated on a reference income between EUR 7,329.22 and EUR 7.678.69
    • Student self-employed persons who owe provisional social security contributions calculated on a reference income of between EUR 7,329.22 and EUR 14,658.44
    • Active retired self-employed persons who owe provisional social security contributions calculated on a reference income higher than EUR 7,329.22
  • Requirement: the self-employed person owes social security contributions in Belgium
  • Measure applicable for the period 1.01.2022-31.03.2022
  • Self-employed persons who are obliged to interrupt their activities completely as a result of the COVID-19 measures 
  • Self-employed persons whose activity depends mainly on a directly targeted self-employed person are not eligible. The health measures enabling the implementation of social distancing and restricting the pursuit of the activity of the self-employed person are also not eligible. Businesses that are closed down due to non-compliance with the rules on social distancing are also not eligible
  • No minimum duration of interruption during the calendar month is required
  • From March 2022, the amount of the financial support is EUR 3,494.32 with family burden and EUR 2,796.34  without family burden in case of full benefit (EUR 1,747.16 and EUR 1,398.17 in case of partial benefit, respectively) when you have an interruption of more than 15 consecutive calendar days per calendar month. In the event of an interruption of less than 15 consecutive calendar days per calendar month, the financial supprt amounts to EUR 1,747.16 with family burden and EUR 1,398.17 without family burden (EUR 873.58 and EUR 699.09 respectively in the event of partial allowance).

 

 How to apply?

  • Application to the social insurance fund, which will provide the application form
  • Application for the months of January, February and March 2022: possible until 30.09.2022 

 

Bridging rights in case of decrease in turnover of self-employed persons - January 2022 to March 2022

For whom?

  • Full benefit for enterprises of all sectors
    • Self-employed persons in their main occupation (including helpers, assisting spouses in maxi-status)
    • Self-employed persons in a secondary occupation who are subject to provisional contributions at least equal to the minimum contributions for self-employed persons in their main occupation
    • Self-employed persons in their main occupation equated with a secondary occupation (art. 37 ARS) who owe provisional social security contributions that are at least equal to the minimum contribution of self-employed persons in their main occupation
    • Student self-employed persons who owe provisional social security contributions that are at least equal to the minimum contribution of the self-employed persons in their main occupation
    • Self-employed persons after retirement age without pension or only the unconditional pension who owe provisional social security contributions at least equal to the minimum contribution of the self-employed in main profession
  • Partial benefit for:
    • Self-employed persons in a secondary occupation who owe provisional social security contributions calculated on a reference income between EUR 7,329.22 and EUR 14,658.44
    • Self-employed persons with a main occupation assimilated to a secondary occupation (art. 37 ARS) who are subject to provisional social security contributions calculated on a reference income between EUR 7,329.22 and EUR 7.678.69
    • Student self-employed persons who owe provisional social security contributions calculated on a reference income of between EUR 7,329.22 and EUR 14,658.44
    • Active retired self-employed persons who owe provisional social security contributions calculated on a reference income higher than EUR 7,329.22
  • Requirement: self-employed person owes social security contributions in Belgium and must have effectively paid the provisional contributions due for at least four out of the sixteen quarters preceding the quarter that follows the quarter of the calendar month to which the application relates
  • Self-employed persons with a turnover loss of at least 40% in the calendar month preceding the calendar month for which the benefit is claimed compared to the same calendar month in the reference year 2019. In addition, the self-employed person must be able to justify the link between the loss of turnover and the COVID-19 crisis. From 1.12.2021 up to and including 31.03.2022, a decline in turnover of at least 65% must be demonstrated 
  • For the months of January - March 2022
  • The financial assistance amounts to EUR 1,679.31  with family burden and EUR 1,343.8 without burden in case of full benefit (EUR 856.45 and EUR 685.38 respectively in case of partial benefit).

 

How to apply?

  • Application to the social insurance fund, which will provide the application form
  • The application for the months of July, August and September can be done until 30.09.2022.

 

Bridging right for the self-employed in other situations

What?

  • The classic bridging right to support the self-employed who stop or interrupt their activity:
    • By bankruptcy
    • Due to economic difficulties
    • By forced interruption or cessation of activity by a decision of a third economic operator or by an event having an economic impact which directly and significantly affects the activity. The coronavirus is considered to be an event with economic impact.

 

How to apply?

Application to social insurance fund (Dutch / French).

 

Exemption overtime

What?

  • The number of voluntary overtime hours is increased to 220 hours instead of 100 hours for all sectors
  • This measure was applicable in the crucial sectors for the whole of 2021 and is also applicable to all sectors in Q3 2021 and throughout 2022
  • The salaries for the 120 additional voluntary overtime hours worked are exempt from overtime pay, social security contributions and withholding tax.

 

Supplementary allowance granted by the employer to the NEO contributions for temporary unemployment

What?

  • Supplementary allowance granted by the employer on top of the NEO contributions which an employee receives in case of temporary unemployment due to force majeure for economic reasons
  • Free of social security contributions
  • Conditions:
    • The supplement does not result in the employee receiving a higher 'net amount’ than he would have received if he had worked
    • The 'net' refers to the taxable salary (gross - NSSO)
    • All employees of the same category are treated equally, by compensating up to a certain percentage of the net salary or by paying lump sum to everyone (but respecting the maximum of the employees with the lowest salary)
    • The average salary of the previous months is taken into account in the case of employees with variable pay
    • Only salaries on which social security contributions are due may be taken into account, i.e. no benefits such as meal vouchers.

 

How to apply?

  • Transmit to payroll provider
  • Any supplements granted for March but which are too high can be compensated by reducing the supplements for the following months
  • A payroll tax of 26.75% is due on the payment.

 

Suspension notice period during Corona unemployment as of 22 June 2020

What?

  • If the employer terminates the employment contract with a notice period (or has terminated it as of 1.032020), the notice period will be suspended as of 22.06.2020 for periods of temporary unemployment due to force majeure as a result of the Corona measures ('Corona unemployment'). The notice period will therefore be extended by these periods
  • Any notice period that starts as of 1.03.2020, and that has not yet expired, is in scope. Therefore, notice periods already started before this date will not be suspended during periods of Corona unemployment
  • Termination given by the employee will also not be suspended by periods of Corona unemployment, regardless of when the notice period starts.

 

Vaccination leave

What?

  • Leave of absence (right to be absent with pay) for
    • employees who are vaccinated against the coronavirus during their working hours
    • employees accompanying a minor child, an adult with a disability or a person under guardianship during the time required for their vaccination against the coronavirus
  • The right to vaccination leave is valid until 30.06.2022 and may be extended (if circumstances so require) up to and including 31.12.2022
  • The worker has this right for the time needed for the vaccination. This is both the time spent at the vaccination centre and the time needed to travel to and from the place of vaccination
  • For all employees and employers who are linked by an employment contract, including job students and temporary employees. Public sector contractual employees are also covered.

 

How to apply?

  • The employee must inform the employer of his absence as soon as possible, as soon as he knows the time of vaccination. 

 

GENERAL TAX MEASURES

 

New measures aimed at encouraging investment

What?

The act of 15.07.2020 containing various urgent fiscal provisions as a result of the COVID-19 pandemic (CORONA III) provides for a number of additional fiscal measures

  • Tax exemption for training courses:
    • Employees who have been working for at least 6 months and who follow certain training courses during a certain period are entitled to an exemption of 11.75% of the salary  (limited to EUR 3,500) of the employee concerned. This measure applies as from 1.01.2021. Sportsmen are excluded from this measure
    • The training must amount to at least 76 hours during an uninterrupted period of 30 calendar days. For small companies, this is reduced to 38 hours during an uninterrupted period of 75 calendar days (part-time workers are subject to a pro rata reduction of the minimum duration of training)
  • Increased investment deduction (25%):
    • For fixed assets acquired or created between 2.11.2020 - 31.12.2020 by one-man businesses, liberal professions and small companies
    • The measure is extended to investments made until the end of 2022
    • The investment deduction for investments made from 1.1.2019 - 31.12.2021, that cannot be used for the taxable period in which the investments were made can exceptionally be carried forward to the next two taxable periods and is lost afterwards

 

INCOME TAX MEASURES

 

Eased application of the conditions for exemption of write-downs on trade receivables due to the COVID-19 crisis

What?

  • Circular 2020/C/45 dated 23.3.2020 confirms that the crisis caused by the Covid-19 virus is a special circumstance, justifying the exemption of write-downs on trade receivables on companies that are in arrears with the payment of those receivables as a direct or indirect consequence of the measures taken by the federal government.

 

How to apply?

  • Companies will have to identify and explain any debtor with solvency problems in the annex to the corporate income tax return (non-residents) - form 204.3. The assessment of the loss on a claim will, as usual, have to be done per debt. However, some flexibility may be applied when assessing the collection difficulties for corporate debtors whose turnover has decreased considerably as a result of the restrictive measures imposed by the federal government.

 

Recovery reserve or reconstruction reserve

  • In the assessment years 2022, 2023 and 2024, a tax exempt reserve ('recovery reserve' or 'reconstruction reserve') can be created, amounting to the accounting loss of 2020
  • Maximum reserve to be established over these 3 years: accounting loss of financial year 2020, with an absolute maximum of EUR 20 million
    • On an annual basis,  the maximum amount of the recovery reserve that can be created cannot exceed the taxable reserved profits of that year
  • This should allow companies to bring their equity as much as possible back to pre-COVID-19 levels
  • The tax exempt reserve must be reported in one or more equity accounts and meet the ‘condition of intangibility’, in order to ensure its (temporary) tax free character
  • Equity must be maintained (no purchase of own shares, capital reduction or dividend payment) + employment level must be maintained
  • There cannot be any links with tax havens (payments, participations in tax haven companies, …)
  • Total or partial reversal – and consequently, taxation of the tax exempt reserve - in case of purchases of own shares, dividend payments, capital decreases or distributions of equity, or in case of a significant decrease (> 15%) in its employment (measured by labour costs)

 

How to apply?

  • Companies can apply the recovery reserve by attaching a form, the model of which must be determined by Royal Decree, to the declaration for the assessment years in which the exemption can be applied.

 

Teleworking

  • Possibility of granting a lump sum homeworking allowance (cost proper to the employer) to employees: allowance for all employees who regularly and structurally work from home (i.e. at least 5 working days/month - from 1/3/2021 equivalent of 1 working day/week): up to a maximum of EUR 126.94/month (for March 2020), EUR 129.48/month (from 1.04.2020), EUR 144.31/month (from 1.04.2021-30.09.2021), EUR 132.07/month (1.10.2021-31.01.2022), EUR 134,71/month (from 1.02.2022), EUR 137,40 /month (from 1.04.2022), EUR 140.15/month (from 1.06.2022):
    • Covers costs incurred for using the home office (including rent and possible depreciation): printer and computer equipment, office supplies, utilities such as water, electricity and heating, maintenance, insurance, property tax, ... in the employee's place of residence
    • Not taxable in hands of the employee
    • The employer can deduct the cost as professional expenses
    • Exempted from social security contributions
    • Employer may not already reimburse the costs in any other way
    • Ruling request possible for costs proper to the employer if:
      • the conditions for the lump sum homeworking allowance are not entirely met
      • the employer wants to create a distinction between different job categories
      • the employer wants to reimburse other expenses
  • In addition, the employer may grant its employees an allowance of up to EUR 40/month for the costs of using the following equipment:
    • Private internet connection and internet subscription: max. EUR 20/month
    • Use of the employee's private pc: max. EUR 20/month
  • The employer can provide its employees with equipment and/or internet or telephone subscription. However, in case of private use: a benefit in kind arises on behalf of the employee:
    • PC: EUR 6/month or EUR 72/year
    • Tablet, mobile phone, smartphone: EUR 3/month or EUR 36/year
    • Telephone plan: EUR 4/month or EUR 48/year
    • Internet connection: EUR 5/month or EUR 60/year
  • Cumulation of the lump-sum office allowance with the reimbursement of the purchase price of office furniture/computer equipment: limitative list.

 

Tax break for the event sector

What?

  • The government is granting a refundable 25% tax credit in the event sector on non-recoverable expenses incurred
  • The tax credit can be claimed immediately for expenses incurred as of 01/01/2021 during a taxable period associated with assessment year 2022
  • Optional measure - the choice is final, irrevocable and binding on the taxpayer.


Modalities

  • The measure is open to companies subject to corporate income tax and non-resident tax
  • Excluded companies:
    • Companies that are 'in difficulty' on the last day of the taxable period in which the non-recoverable costs were incurred
    • Companies whose taxable result is positive (for application of this tax credit)
  • The event must be scheduled to take place in the period from 01.10.2021 to 28.01.2022
  • As a result of measures taken by the federal government, regions, communities, provinces or municipalities, the event was cancelled
  • Applicable to expenses incurred as of 01.01.2021 during the taxable period associated with assessment year 2022
  • A statement must be attached to the declaration stating the amount of the aid from the tax credit granted and other aid granted by the federal government, regions, communities, provinces or municipalities and which was granted to this enterprise or to a company belonging to the same group of companies as this enterprise during the current and last two closed taxable periods.

 

Tax benefit

  • Deductible and refundable tax credit of 25%
  • The tax advantage is calculated on the basis of the expenses actually made and which are non-refundable
  • All expenditure incurred in preparation for the event but which will no longer result in income from the event
  • Examples: staff costs incurred, cancellation costs, advance payments and invoices for marketing campaigns, artists, etc.
  • Are not eligible:
    • Waived costs
    • Costs that are not directly related to the organisation of the event such as food and drink, reimbursement of participation fees by exhibitors, etc.
    • Expenses financed by public intervention
  • If opting for the tax credit: no deduction of the non-recoverable expenses as professional costs.

 

INDIRECT TAX MEASURES

 

Reduced VAT rate on the supply, intra-Community acquisition and import of protective equipment

What?

Mouth masks and gels
  • Reduced VAT rate of 6% on the supply, the intra-Community acquisition and the import of the following protective equipment:
    • Mouth masks 
    • Hydro-alcoholic gels.
    • Temporary measure: from 01.04.2022 - 30.12.2022. 
​Vaccines and in-vitro diagnostics
  • ​Reduced 0% rate on the supply, the intra-Community acquisition and import of COVID-19 vaccines and in vitro diagnostic medical devices against this disease and closely related services
    • Temporary measure: from 01.01.2021 - 31.12.2022

 

Harmonisation of VAT refunds

What is it? 

  • In order to support the liquidity of companies, the threshold amounts for the demand of VAT refund are reduced (and aligned with the threshold amounts for foreign companies)
  • Measure applies from 1.01.2021
  • For start-ups and year end reporting the threshold amounts to EUR 50
  • For periodical reporting enterprises, the threshold amounts to EUR 400
  • Start-ups can claim a refund of the VAT credit every month.