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Simple yet essential insights

The attentive To the Point reader has already noticed. Our FAQ section has introduced a new concept. Instead of sorting out one theme based on ten specific questions, we are now bringing different themes to your attention based on one question. Not randomly, but based on the questions that we have recently received from our customers.

Can my employee still just telework from any neighbouring country?

Teleworking or working from home became the ‘new normal’. During the COVID-19 pandemic, many employees were required or given the opportunity to work from home. Many employees now continue to telework. However, when working in a relationship between Belgium and neighbouring countries, this can now have important tax and legal consequences for both the employee and the employer.

During the COVID-19 pandemic, Belgium concluded mutual COVID-19 agreements with its neighbours. These agreements, under certain conditions, provided for a so-called ‘fiction’ for the days on which the employee worked from home: these days could be equated with days worked in the original country of employment. In this way, in most situations, there were no fiscal consequences associated with teleworking in a neighbouring country during the pandemic. But that has changed!

The COVID-19 agreements were terminated for good on 30 June 2022. With this, the fiction also disappeared and, as of 1 July 2022, the teleworking days are taxable in the country of residence of the employee. This obviously has consequences in many other areas, including labour law, social security, payroll administration, etc. With regard to social security, the European Administrative Commission has however provided for a transitional period until 31 December 2022. However, certain formalities must also be completed during this period.

Want to know more? Contact the experts of our Tax team: tax@bdo.be

What does the new Contract Law (Book 5 of the Civil Code) say?

The new Book 5 enters into force on 1 January 2023. And is thus applicable to all contracts concluded as from that date. The aim? To make contract law more accessible by taking into account two centuries of jurisprudence. The rules do not change much in terms of content, except for a few important innovations for individuals and companies.

For contracts concluded before 1 January 2023 (including subsequent addenda), the ‘old’ Code will continue to apply, unless the parties agree to apply the provisions of the new Book 5.

What is new is that, under certain conditions, a party to a contract can ask that particular agreements be renegotiated. For example, because of an unforeseen change or because the context has changed significantly. If the renegotiation fails, the parties can then ask the court to amend or terminate the contract. Other innovations include:

the ‘early termination’: henceforth, a contract cannot only be terminated in the event of serious failure by a party to fulfil its obligations, but also when it is clear that the debtor will not fulfil its obligations in good time;
a new sanction: the ‘price reduction’. If a party to a contract fails to fulfil its obligations under the contract and this is sufficiently serious to justify its cancellation, the creditor can legally demand the price reduction.

Want to know more? Contact the experts of our Legal team: legal@bdo.be

How and why to calculate the TCO of company cars?

The Total Cost of Ownership (TCO) is an estimation of the total cost of a vehicle across its entire lifecycle (i.e. taking into account not only purchase price but also taxes, insurances, maintenance/repairs, fuel and/or electricity, tax and social implications, …). This calculation is important because of four reasons:

to compare the total net cost of different cars and model types within your fleet;
to decide which cars are the best fit based on different needs (such as distance range, preferences, …);
to manage fleet budget given the reform of the car taxation (and progressive decrease of deductibility of car costs);
to analyse and decide the composition of the abovementioned elements.

The TCO of a vehicle is not fixed over time and can fluctuate as the purchase prices increase, residual values change and fuel prices rise or fall. But more impacting car costs is the new legislation of car taxation (from 1/1/2023) in which the Belgian government decided to discourage the investment in vehicles that emit CO₂.

The TCO is calculated based on the different car costs and their tax impact. Our experts developed a tool through which we can provide you with a tailor-made TCO calculation.

Want to know more? Scan the QR code or contact the experts of our Tax team: tax@bdo.be.

Also read the testimonial from Sopadis ‘Sustainable mobility is not a clear-cut issue’.

What do unpaid invoices cost?

As from 1 February 2022, the contractually stipulated payment term for B2B invoices may not exceed 60 days. Longer payment terms that, for example, are imposed by an economically stronger party on the economically weaker party are no longer legal. The legal payment term (if nothing is stipulated in the agreement) remains 30 days.

The deferment of payment that you, as an entrepreneur, grant to a customer not only has a real impact on the cash flow, but also on your results and margins. Take Robin, for example, who has a cleaning company with an annual turnover of EUR 2 million. Or 40,000 invoiced hours at an average of EUR 50. He receives the news that a receivable of EUR 50,000 has been lost.

	Initial situation	Impact loss of receivable	Effort to recover initial situation
Turnover (EUR)	2,000,000	1,950,000	2,050,000
Fixed costs (EUR)	600,000	600,000	600,000
Variable costs (EUR 25/hour)	1,000,000	1,000,000	1,050,000
Result (EUR)	400,000	350,000	400,000

Taking our assumptions into account, Robin must realise an additional turnover equal to double the lost receivable in order to recover his result. The higher the variable costs of the cleaning company (e.g. wages, travel costs, etc.), the greater the effort. Or still: the lower the (variable) margin percentage, the greater the effort to compensate the loss.

In these uncertain times, it is thus in the interests of an entrepreneur to pre-emptively control receivables when acquiring a new customer. This can be done by screening the customer’s financial situation, clearly describing the order or agreeing on clear sales terms and conditions. In day-to-day management, fast invoicing is essential. If there are still problems with the collection of the invoice, then finding a compromise is important.