Working from home: what tax-exempted options does an employer have with respect to reimbursing costs and providing supplies for home offices as from 1 March 2021?
Author: Melissa Claessens, Supervisor BDO Tax
As from 1 March 2021, the new tax circular (Circular 2021/C/20), created in consultation with the National Social Security Office, comes into force for situations of working from home that have occurred since 1 January 2020. On the basis of this circular, the employer can confer certain allowances/goods exempted from income tax to employees who are working from home. This circular replaces the first circular concerning working from home allowances of 14 July 2020 (Circular 2020/C/100) and it will continue to apply after the mandatory working from home rule will be lifted. We summarise the most important points below.
What is reimbursed?
The circular deals with the income tax consequences of working from home for the employee of:
Who is granted a reimbursement?
“Thanks to the new tax circular (Circular 2021/C/20), the employer can confer certain allowances/goods exempted of income tax to employees who are working from home.”
Only employees/civil servants who perform “home working” fall under the application of this circular. The home working must be performed on the employee’s private premises on normal working days (i.e. not in the evening or during the weekend).
The circular is not applicable for company managers (article 32 BITC and tax form 281.20), foreign executives, and employees who fall under special regimes (“salary split”/split remuneration). However, for these tax obligations, a tax ruling can be requested from the Office for Advance Tax Rulings (‘OATR’).
Several new points for attention in the 2021/C/20 circular
Flat rate reimbursement for office costs
Regular and structural working from home
The reimbursement of office costs may be granted as soon as the working from home on a regular and structural basis commences, i.e. the equivalent of 1 working day per week. This must be assessed on a monthly basis.
If the working from home is non-structural, the employer will have to demonstrate that the allowance that is intended to cover costs which are the employer’s proper costs, is actually spent on such costs, and when they are granted on a flat rate basis, the amount is determined on the basis of substantial and consistent norms and corresponds to reality. Obtaining a tax ruling from the OATR can offer legal certainty here.
Differences between employees in the amount granted is possible
A differentiation in the office costs allowance can be made on the basis of personnel category or the actual circumstances.
Examples of office costs
The circular contains a non-exhaustive list of costs covered by the flat rate amount (see table below for the amount):
Reimbursement of costs for office furniture/IT equipment
In addition to the flat rate office costs allowance, the tax authorities also accept the contribution of the employer in the purchase of the following office furniture/IT equipment financed by the employee (exhaustive list):
Ergonomic equipment can qualify if the employer also provides this type of equipment in the workplace under normal circumstances. In the event of these reimbursements, a double burden proof applies :
In addition, the investment must not be unreasonable or of a personal (private) nature. The repayment may be made as a lump sum or staggered over the estimated normal period of use which varies between 10 and 3 years.
Provision of office furniture/IT equipment
The tax authorities also accept that the provision of the goods by the employer listed above is necessary for the normal exercise of the professional activity. This provision does not give rise to the taxation of a benefit in kind as long as it does not unreasonably exceed the needs resulting from homeworking, nor does it affect the reimbursement of office costs.
However, if it concerns a PC, tablet, internet connection, mobile phone, fixed or mobile telephone subscription, (as before) it will be taxed as a benefit in kind:
|Provided by the employer:||Valuation of benefit in kind for private use (NSSO and tax authorities):|
|PC||EUR 6/month or EUR 72/year|
|Tablet, mobile phone, smartphone||EUR 3/month or EUR 36/year|
|Telephone subscription||EUR 4/month or EUR 48/year|
|Internet connection (landline or mobile)||EUR 5/month or EUR 60/year|
Furthermore, if the employee may keep the goods made available after the end of a professional activity or the working from home, a taxable benefit in kind must be charged in the amount of the fair residual value of the investment.
|Type of cost (cumulation possible)||Maximum amounts|
|Reimbursement of office cost||EUR 129.48/month (increase during the months of April/May/June 2021: EUR 144.31/month) – indexation follows that of the NSSO|
|Reimbursement of costs for the professional use of a private internet connection and subscription||EUR 20/month|
|Reimbursement of costs for professional use of|
||EUR 20/month OR|
||EUR 5/month per item with a maximum of EUR 10/month|
Of course, it remains possible not to work with flat rates, but instead to reimburse the actual value of the costs incurred on submission of supporting documents.
Want to know more about the original regulation?
See our article “Teleworking from a legal, tax and ‘change’ perspective” in To The Point 02/2020, or contact our Tax experts via email@example.com.