Extended reporting obligation on the tax form for costs proper to the employer
Costs proper to the employer are reimbursed either based on actual costs (through supporting documents) or on the basis of a (monthly) lump sum. Until the income year 2021, these costs had to be mentioned on the tax form, but in most cases without a mention of the corresponding amounts.
From the income year 2022 onwards, the amounts of all costs must be indicated on tax form 281.10. This is therefore a good time to scrutinise your company's reimbursements of costs.
In this newsletter, we discuss the most important aspects of this extended obligation of the tax form.
Extended obligation as from income year 2022
There are two types of reimbursement of a cost proper to the employer :
1. Reimbursement based on a lump sum expense allowance, i.e. a fixed amount per month. The lump sum expense allowance is classified depending on whether it is based on:
“serious criteria”, i.e. lump sums which :
- the government itself grants to its civil servants and are therefore accepted by the tax authorities if certain conditions are met (for example: the lump sum mileage allowance for professional travel, daily allowances for domestic and international business trips, the home working allowance equal to € 134.71 per month in case of structural teleworking); or
-
are determined by the employer on the basis of a sufficiently substantiated file. The employer has kept a record of expenses for a sufficient period of time in order to determine a monthly lump sum based on the average costs.
Ideally, the employer repeats this step regularly so that the lump sum remains justified. However, it is recommended to present the amount of this type of expenses to the tax authorities in advance so that the employer can obtain a ruling. This way, the employer has certainty about the amount of the lump sum expense allowance.
“non-serious criteria”: these include the reimbursement of expenses that have not been determined according to serious criteria. For example, a representation allowance without an underlying file supporting the amounts.
! The tax authorities and the social security authorities are not always on the same page, so it must also be verified whether the social security authorities agree with the amounts. For example, the tax authorities may accept a representation allowance based on a supporting file, but the social security authorities recently changed their point of view and no longer accept a representation allowance without a ruling.
2. Reimbursement of actual expenses based on supporting documents ("expense notes"), for example: reimbursement by the employer to the employee of the cost of a business lunch or a hotel for a business trip.
Until the income year 2021, only amounts for lump sum expense allowances that were not based on serious criteria had to be indicated on tax form 281.10. For all types of expenses, the obligations were as follows :
| Mention | Indicate amount | |
|
Category 1: Reimbursement based on actual and proven costs. |
Yes | No |
| Category 2: Lump sum expense allowance determined according to serious criteria. | Yes | No |
| Category 3: Lump sum expenses allowance not determined according to serious criteria. | / | Yes |
From the income year 2022, the amount of actual costs and all lump sum expense allowances must be declared via tax form 281.10.
The above table changes as follows from the income year 2022 :
| Mention | Indicate amount | |
| Category 1: Reimbursement based on actual and proven costs. | Yes | Yes |
| Category 2: Lump sum expense allowance determined according to serious criteria. | Yes | Yes |
| Category 3: Lump sum expenses reimbursement not determined according to serious criteria. | / | Yes |
What are the expense allowances concerned?
From the income year 2022 onwards, the amounts of all expenses proper to the employer must be included in tax form 281.10 (business lunch expenses, business travel expenses, home working allowance, etc.), regardless of whether they are lump sum expenses or actual expenses.
Consequences
The costs proper to the employer of which we are aware, still have to be qualified under one of the above categories. Your payroll business partner will contact you soon and provide you with an overview of the costs proper to the employer of which we are aware, so that you can inform us whether the costs are considered as actual costs or are based on on (non-)serious criteria.
Concerning the preparation of the tax forms for 2022 :
- If all expenses are included in the payroll, we are aware of these amounts and we can automatically include them in the tax form next year. You do not have to do anything except inform us in advance under which category these expenses fall (see above).
-
If you do not have any expenses or only submit lump sum expenses via the payroll, you must separately report to Pro-Pay the amounts of the (actual) expenses and the qualification of these expenses as actual costs or as lump sum costs according to serious or non-serious criteria. It is sufficient that you provide this information to your Payroll Business Partner when we request the necessary information for the preparation of the tax forms of 2022.
As the above obligation starts from the income year 2022, we will have to receive the data on the expenses that are unknown to us for the first time at the beginning of 2023. We will contact you in due time about this.
! This new information will allow the tax authorities to have a view idea of what expenses you are reimbursing within the company. This can lead to more targeted controls by the tax authorities, so use this opportunity to verify whether you can justify the reimbursement of all expenses (lump sum and actual) that you grant.
Sanctions in case of non-compliance
If the amounts are not mentioned on the tax form 281.10, the penalties depend on the type of costs :
- "Fixed" lump sum expense allowance: tax authorities may refuse the deduction of the costs as professional expenses and/or apply the secret commission tax of 309 %.
- "Variable" actual costs: the tax authorities can impose an administrative fine. However, the deductibility will not be refused, nor can the secret commission tax be applied.
! Action points
- In response to the overview you will receive, provide your Payroll Business Partner with the correct qualification of the costs proper to the employer we process for you via payroll.
- If you are reimbursing certain expenses outside the payroll, you must keep good records of these amounts so that you can provide us with the necessary data at the beginning of 2023.
- Carry out an analysis within your company to determine whether the (lump sum) reimbursement of expenses is justified.
