BDO Belgium: Teleworking impact on employees

April 2021

The corona crisis has impacted our lives in an unprecedented way. Not only did we have to adjust personally and socially, our professional lives also significantly changed with organisations and its employees being obliged to reorganize their way of working in the blink of an eye. It’s likely that teleworking will become a habit as this ‘new normal’ we have been living in for over a year highly favors employees working remotely more frequently. This home office treatment will also have an important impact on employees working in a cross-border situation and the companies they work for. That is why employees and company directors benefitting from the Belgian special tax status for foreign executives and specialists should be given special attention.
 

Foreign travel exclusion

As you may know, one of the main benefits of this special tax regime consists of the so-called “foreign travel exclusion”. Under this mechanism, the portion of the salary pertaining to the days spent abroad for professional purposes is deducted from the taxable basis and consequently, exempted from taxation in Belgium. Considering the impact of this mechanism on the taxable basis of the foreign executive, it is of utmost importance to accurately determine his/her travel exclusion percentage in order to evaluate his/her Belgian tax liability. In this respect, for many of these people, the COVID-19 travel restrictions have influenced the travel exclusion percentage due to cancellation or postponement of business trips. On the other hand, some of these executives can work from home, which is not necessarily in Belgium.