Costs proper to the employer: important change coming up

Jill Engelen   |  

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Jill Engelen

Jill is het aanspreekpunt voor loonadministratie en juridisch advies op vlak van sociale wetgeving.

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Many employers pay their employees a lump-sum cost allowance each month, the so-called CPE (costs proper to the employer). This represents an interesting way of optimising the net income of employees. Moreover, these allowances are considered as deductible professional expenses if they are mentioned on the tax form of the employees concerned.

The tax authorities would like to get a better view of the granted amounts. That is why a new tax regulation was concluded in which an extended tax form obligation is introduced. In other words, in the future, more information will have to be provided regarding these allowances on the tax form 281.10.

What is the current situation?

Currently, there is a reporting obligation. The type of reimbursements made in the concerned income year must be declared on the tax form 281.10:
1. an allowance based on actual and proven costs
2. a lump-sum allowance, determined according to serious and consistent standards
3. a lump-sum allowance, not determined according to serious and consistent standards 
Currently, employers must only disclose the amount in situation 3. For situations 1 and 2 this is not required.

What changes from 2022 onwards?

As from income year 2022, the situation changes. From then on, the employer is required to mention the amount of the reimbursement on the 281.10 tax form in all situations. This will enable the tax authorities to exercise further control on possible abuse. This new extended tax form obligation also applies to allowances paid by a company to its business leaders.

This new legislation will almost certainly involve additional paperwork. It may be that a manual search in your bookkeeping will be necessary at times. Therefore, it is recommended to keep track of all reimbursements as from 2022. Failure to comply with this new legislation may lead to a sanction, being the non-deductibility as a professional expense and/or an administrative fine.

Discuss your situation with our experts

Do you have any specific questions about this new change? Do not hesitate to contact us. Our team of experts will be happy to help you.