Positions taken on temporary housing costs and tax assistance in respect with the special tax regime for foreign executives (expat status)
The Minister of Finance confirms two positions related to the special tax regime for foreign executives: the reimbursement of temporary housing costs exceeding a period of 3 months and assistance with the preparation, completion and follow-up of the Belgian tax return (provided by the employer) are considered as a benefit in kind granted to the foreign executive.
In response to a parliamentary question, the Minister of Finance has taken two new positions with regard to costs proper to the employer as described in the Circular Letter of August 8, 1983 dealing with the special tax regime for foreign executives (the so-called expat status).
This Circular Letter states that certain reimbursements made by the employer are to be considered as costs proper to the employer and are therefore not taxable on the foreign executive’s behalf. This includes, on the one hand, the one off expenses for moving to Belgium, for setting up a home in Belgium and for moving from Belgium to a foreign country and, on the other hand, the recurring additional costs, limited to EUR 11.250 or EUR 29.750 depending on the function of the foreign executive.
In practice, it is accepted that the reimbursement by the employer of temporary accommodation expenses in anticipation of the foreign executive finding more permanent housing is considered a reimbursement of costs proper to the employer that results from the move to Belgium.
The Minister of Finance has now taken the position in an answer to a parliamentary question that the reimbursement of housing costs or the provision of a flat or house for a period of more than 3 months must be considered a benefit in kind. Consequently, if a period of three months is exceeded, the reimbursement of these costs becomes taxable on behalf of the foreign executive. This defines the 'temporary' character to a maximum of 3 months.
In addition, the Minister of Finance has taken a second position stipulating that the assistance related to the preparation, completion and follow-up of the Belgian tax return provided by the employer cannot be considered as expenses proper to the employer. Such expenses are of a personal nature and are therefore considered to be a benefit in kind for the foreign executive.
These two positions certainly have important consequences for employers who temporarily employ foreign executives in Belgium.