reporting costs, advance payements, accountancy reporting

Changed reporting obligation regarding costs proper to the employer

Marc Verbeek
05/10/2021
reporting costs, advance payements, accountancy reporting

Traditionally, costs proper to the employer are defined as costs incurred by an employee or company director in the course of their professional activity, but which are for the account of the employer. These costs are often 'advanced' by the employee or the director and subsequently reimbursed via 'expense reports'. However, for the sake of convenience, the lump sum allowances foreseen by the tax authorities and the social security authorities are often used.

In order not to jeopardize the (limited or unlimited) deductibility of these costs in the name of the employer and/or not to run the risk that these costs would be subject to the special assessment as secret commissions, employers better report both the lump sum reimbursed costs as the costs reimbursed on the basis of supporting documents on the individual pay slips 281.10 of the employees respectively 218.20 of the directors.

Actual reporting obligation

Currently, the following statements must be mentioned on the forms:

  • If it concerns a lump sum reimbursement determined in accordance with serious standards: YES, serious standards
  • If it concerns a lump sum reimbursement that has not been determined in accordance with serious standards: the amount of the reimbursed costs
  • If it concerns a reimbursement that  has been determined on the basis of supporting documents: YES, supporting documents.

If different types of expense allowances are granted, a combination of the different statements should be mentioned.

Future reporting obligation

As from January 1, 2022, for reimbursement of costs based on supporting documents, the amount must also be mentioned on the salary form. This must be done in the 'miscellaneous information' box. Failure to do so will result in an administrative sanction. However, the non-deductibility of the costs is not jeopardized and the assessment as a secret commission is not immediately threatening.
Note that it was already provided that from that same date the actual amount paid as home-work allowances must also be included on the forms.

Ratio legis

The introduction of this stricter reporting obligation should allow the tax authorities to better verify cost reimbursements. On the one hand, they want to limit the double reimbursement of costs on the one hand on a lump sum basis and on the other hand on the basis of supporting documents. On the other hand, they want to avoid that that employees deduct certain costs as actual professional  xpenses while they already receive a lump sum allowance from their employer for the same costs.

Conclusion

The additional reporting obligation once again increases the administrative burden on employers.

And although this will only take effect for payments from January 1, 2022 and must therefore only be included in the forms that must be submitted before March 1, 2023, employers do well to already think now about a system to ensure that this reporting runs smoothly. It is also a good opportunity to take a critical look at the actual full package of cost reimbursements.

 

Marc Verbeek
Marc Verbeek
Tax Partner
Crowe Spark