Social Security

Belgian social security contributions on benefits from an affiliated company to a Belgian employee?

Marc Verbeek
Social Security

Recently a new position was taken by the Belgian social security authorities in respect of the liability to Belgian social security contributions of benefits granted by a foreign parent company to employees working in Belgium for a local subsidiary. 

What has changed?

This was achieved by a broader interpretation of the definition of what needs to be understood as ‘salary’.

‘Salary’ is described as every benefit in cash or valuable in cash:

  • That is granted by an employer to its employee  in return for work performed under an employment contract
  • To which the employee is entitled following an employment and that is borne by the employer, directly or indirectly.

In the past the social security authorities took the position that a benefit was indirectly borne by the employer when, without bearing the financial cost of the benefit, the employer acted as a single point of contact to which the employees could turn to if they did not receive the benefit.

Following this position, benefits received from the parent company or another group company by a Belgian employee without any intervention of his actual Belgian employer, would not qualify as salary and therefore no Belgian social security contributions were due.

In their administrative instructions of the third quarter of 2018, this position was adjusted in that sense that when an employee receives a benefit following his labour agreement with his Belgian employer, irrespective of who grants the benefit, this should always be subject to Belgian social security contributions.

As from when this new position will enter into force is not clear yet.  Further there is some doubt as to the legality of this new position.

What does that mean?

This means that on any benefit that is granted to a Belgian employee following his employment with his employer, Belgian social security contributions will be due. 

This would f.e. apply on RSU granted by foreign group companies to employees working in Belgium.