New circular letter on daily lump-sum allowances for employees travelling abroad.
The Belgian tax authorities have issued a new administrative circular letter regarding lump-sum allowances for business expenses incurred abroad. This circular letter of 11 May 2006 adresses the scope of application of such allowances and is applicable with immediate effect.
Allowances given by an employer to his employee to cover foreign business travel expenses are costs proper to the employer. These allowances are tax exempt for the employee and are deductible for the employer. The circular letter confirms that such daily lump-sum allowances are exempt from tax to the extent that they don not exceed the lump-sum per diem allowances paid by the Federal Public Service Foreign Affairs to its civil servants who go on a mission abroad, based on the official list Foreign Affairs.
The standard daily lump-sum allowance for expenses incurred abroad amounts to a minimum of 37,18 euro. Depending on the destination, higher amounts may be claimed under the aforementioned list published by the Ministry of Foreign Affairs.
These amounts apply for employees going on short business trips of up to 30 calendar days. If a trip exceeds 30 days, substantiating documents must be presented for reimbursement of expenses. Similarly, the reimbursement of expenses related to one-day trips that do not last at least 10 hours may not be made on a lump-sum basis.
Daily lump-sum allowances are used to repay the sums that employees spend on meals and other minor expenses (local transportation, snacks and drinks, tips, local communication,…) Accomodation expenses or travel costs to and from the foreign destination are not included and may be fully reimbursed only on the basis of actual invoices or other documentary proof.
These lump-sum allowances paid to reimburse short business travel expenses are made up as follows:
15% of the allowance covers the costs of breakfast
35% covers the costs of lunch
45% covers the costs of evening meals
5% covers other minor expenses
If the employee on a mission abroad only bears part of the costs, for instance, because evening meals are paid back seperately on the basis of an expense note, the aforementioned percentages should be used and applied in order to avoid double reimbursement of expenses of the employee.
Circular letter of 11 May 2006 in Dutch: http://www.fisconet.fgov.be/nl/?frame.dll&root=V:/sites/FisconetNldAdo.2/&versie=04&type=cir!INH&
Circular letter of 11 May 2006 in French: http://www.fisconet.fgov.be/fr/?frame.dll&root=v:/sites/FisconetFraAdo.2/&versie=04&type=cir!INH&
The list of the indexed lump-sum allowances granted by the Ministry of Foreign Affairs to its personnel is published in the Belgian Official Gazette:
Dutch version: http://www.ejustice.just.fgov.be/doc/rech_n.htm
French version: http://www.ejustice.just.fgov.be/doc/rech_f.htm
