Author: ibizz

Foreign employees who are not European Economic Area (EEA) citizens need a work permit or a single permit to work on the Belgian territory, unless they are exempt from this requirement.

The authority to grant a work permit or a single permit has been regionalized. Each region can therefore determine its own conditions to grant a work permit/single permit. They therefore also each determine the salary conditions that may apply to grant a work permit/single permit in their respective region (Brussels-Capital Region, Walloon Region and Flemish Region).

In the course of 2024 all regions have adapted there rules regarding work permits/single permits. Since 1 October 2024, minimum gross salary limits in the Brussels-Capital Region are expressed in gross monthly salary instead of gross annual salary (see our newsletter regarding the new immigration rules in Brussels).

As from 1 January 2025 the following minimum gross salary limits will apply for the category of highly qualified staff, executives who want to work in Belgium and the employees who want to apply for an European blue card:

In addition to these salary limits, other conditions must additionally be met in order for the employee to qualify for a work permit/single permit.

Do not hesitate to contact our legal department for more information on immigration at the following e-mail address: legal@pro-pay.be.

The Reference CO2 emissions for the income year 2025 have been published

The reference CO2 emissions are a crucial element for the correct calculation of the benefit in kind for company cars. As in previous years, the reference CO2 emissions have decreased once again.

What does this mean in practice? A reduction in the reference CO2 emissions results in an increase in the benefit in kind for the same vehicle.

Reminder: Benefit in Kind for Company Cars

When a company provides a vehicle to its employees, a taxable benefit in kind arises if the employees also use the vehicle for private purposes.

Since 1 January 2012, the benefit in kind for a company car has been calculated as follows:

(Catalogue value of the vehicle × age coefficient) × 6/7 × CO2 percentage

The age of the vehicle affects the catalogue value, with the period since the vehicle’s first registration taken into account.

The CO2 percentage is a variable percentage depending on the CO2 emissions of the specific vehicle.

Reference CO2 Emissions for the Calculation of the CO2 Percentage

The CO2 percentage is determined by comparing the CO2 emissions of the relevant vehicle to the reference CO2 emissions. For 2025, the reference CO2 emissions are established as follows:

• 71 g/km for vehicles with a petrol, LPG, or natural gas engines;
• 59 g/km for vehicles with a diesel engines.

The base CO2 percentage is 5.5% for the reference CO2 emissions listed above. If the vehicle’s CO2 emissions are higher or lower than the reference emissions, the base percentage is respectively increased or decreased by 0.1% per gram of CO2.

The CO2 percentage is subject to a minimum of 4% and a maximum of 18%.

Comparison with Previous Years

In 2024, the reference CO2 emissions were

78 g/km for vehicles with a petrol, LPG, or natural gas engines;
65 g/km for diesel vehicles.

In 2023, these values were 82 g/km and 67 g/km, respectively.

Numerical Example

An employee has a company car, a Mercedes-Benz worth EUR 33,695, with a diesel engine and CO2 emissions of 108 g/km.

• 2025 Benefit in Kind: EUR 252.71 per month.
• 2024 Benefit in Kind: EUR 238.27 per month.

This represents an increase of 6% in the benefit in kind compared to the same new diesel vehicle in 2024.

Note: In this example, the age coefficient has been disregarded.

Entry into Force

The new reference CO2 emissions apply to benefit in kind calculations for company cars as from 1 January 2025.

Does the Company Need to Take Action?

The benefit in kind for a company car is automatically calculated correctly, taking into account the new reference CO2 emissions. Therefore, no specific action is required. However, if a company car is replaced during the year, it is important to immediately inform your Payroll Business Partner.

What is it about?

A new reporting obligation has been introduced requiring the inclusion of the taxable benefit of company bikes on tax forms starting from 1 January 2024.

This new obligation stems from the Circular 2024/C/22 of 28 March 2024, issued by the Belgian tax administration.

Reminder (1): forms 281.10 / 281.20

The tax form 281.10 (for employees) / form 281.20 (for company directors) provides an annual overview of wages, as well as expense reimbursements and benefits in kind granted.

The tax form relating to income year 2024 must, in principle, be submitted by the end of February 2025 at the latest (the deadline and template form are to be communicated by the Federal Public Service (FPS) Finance). Pro-Pay will begin preparing the forms in January 2025.

Reminder (2): exemption for the company bike benefit

A company bike is made available to the employee (or company director) and is owned by the company or leased by the company.

Reminder: if certain conditions are met, the benefit of the company bike is exempt from taxation.

Only those whose professional expenses are determined on a lump-sum basis in their personal income tax return can benefit from this tax exemption (meaning the employee/director does not proof his actual professional expenses in the personal income tax return).

Therefore, there are no changes to the respective payroll processes regarding the company bike. This is purely an additional reporting requirement for inclusion on the tax form.

Tax form in 2025: inclusion of the company bike benefit

As from income year 2024, the benefit of the company bike must be fully reported on the tax form.

The benefit of the company bike must be determined at its actual value for the recipient of the benefit.

The actual value is the saving the employee/director realizes by having the bike provided free of charge by the employer/company.

The Belgian tax administration clarified in its Circular 2024/C/22 the elements to be considered when determining the actual value – namely: the nature, size, and value of the offer.

The benefit will naturally vary depending on the value of the bike and accessories, as well as the cost of associated services. In any case, this valuation must include VAT.

Employers or companies are responsible for assessing the benefit on a case-by-case basis, considering the actual circumstances and establishing the actual value for the recipients, which corresponds to their realized savings.

To start, you can consult your bike leasing company or dealer to determine the actual value of the company bike. Additionally, your accountant can assist in finalizing this valuation.

Exception: mobility budget

When the bike is provided to an employee under the legal mobility budget, the company bike benefit does not need to be reported separately on the tax form. Instead, the total amount of the mobility budget for the relevant year must be declared, i.e., the sum of its three pillars.

Time to act!

As in previous years, your payroll business partner will contact you in January 2025 to gather the necessary information for preparing the tax form.

At that time, you will also need to provide the actual value of the company bike.

To ensure a smooth process, it is important to start collecting this information now.

Commercial contracts entered into by your company with its customers, that are governed by Belgian law are largely governed by the rules of the Civil Code.

From 1 January 2025 onwards, Book 6 of the Civil Code implements a major reform on liability. From then on, customers of your company will be able to hold your ‘auxiliary persons’ – including your employees, freelancers, directors and subcontractors – directly liable in case of contractual breaches. Whereas previously (until 31 December 2024) only your company could be held liable, this reform exposes these auxiliary persons to extra-contractual claims from your customers.

However, this new regulation is supplementary, which means that companies can mitigate these risks by including specific exemption clauses in their contracts and general terms and conditions. By adapting your contracts in other words, you can protect your team and prevent your clients from taking direct action against them. We therefore recommend that you amend your general terms and conditions to ensure that this exemption is added, ideally even before the new legislation comes into force.

In addition, we recommend that you contact your insurance broker to check whether your current professional liability insurance covers all your auxiliary persons, whether your insurance also covers claims directly addressed to auxiliary persons and what costs are covered (e.g. costs for legal assistance to the auxiliary person).

Pro-Pay can assist you to amend your contracts to avoid your auxiliaries being held non-contractually liable. You can contact us through the following email address: legal@pro-pay.be

The end of the year is approaching: colleagues are making arrangements for the holidays between Christmas and the New Year and a few forward-looking souls are already dreaming about their holiday destination for the summer of 2025. On the other hand, the workaholics don’t have time for time off… Let’s look into some frequently asked questions about holidays.

Accrual of taking annual leave. What are the basic rules?

According to the Belgian legislation on holidays, an employee accrues holiday rights based on her/his professional performance in the preceding calendar year. The calendar year during which the employee takes her/his holidays is referred to as the holiday year. The preceding calendar year, during which the entitlement is accrued, is referred to as the holiday reference year.

The same rules determine that an employee needs to take her/his legal holidays before the end of the holiday year. In other words, the employee is obliged to take all her/his legal holiday accrued in 2023, by 31 December 2024.

My employee asks if (s)he can carry over holidays to the next year. Is that allowed?

The law states that carrying over leave is not allowed and that an employee who does not take all of her/his holidays consequently loses the non-taken days. A white-collar worker can therefore not ask her/his employer to pay these days.

For blue-collar workers the rules are different: they receive their holiday pay directly from the National Holiday Fund and the holiday pay remains acquired, whether or not they take all their holidays.

Please note that in practice, a lot of Belgian companies allow for a limited number of legal holidays to be carried over at the employee’s request which then have to be taken within a limited timeframe.

As from holiday year 2024, statutory holidays can actually be carried over in a limited number of cases.

How does the new system of carrying over holidays in cases of long-term suspension and the inability to take legal holidays?

If an employee is unable to take holidays by 31 December 2024 due to a long-term absence because of an (occupational) accident or illness, incapacity for work, maternity leave, paternity leave, prophylactic leave, adoption leave, foster care leave or a foster parent leave, the employee must be able to carry over these days.

• ! It must be a case of force majeure, where the employee cannot possibly still take his holidays in 2024. For example, it does not include the case where, towards the end of the year, the employer refuses to let an employee, who was sick for six months during the year, still take his holidays. However, if an employee is ill from, for example, 3 November 2024 to 17 January 2025, he is unable to still take his legal holidays in 2024.

In these cases of suspension, the untaken holidays must be granted within the 24 months following the end of the holiday year.

Holiday pay for days not taken is paid to white-collar workers by 31 December of the relevant holiday year. Blue-collar workers retain their holiday pay through the holiday fund.

What are the possible consequences for me as an employer if not all the holidays are taken?

As an employer, you have the obligation to ensure that your employees take their holidays. Not meeting that legal obligation can be sanctioned with an administrative and even a criminal fine.

In practice, you need to make sure to inform your employees sufficiently about the fact that they need to take their outstanding holidays. If your employee, notwithstanding your efforts to warn her/him, decides not to take the days (s)he is entitled to, you will not risk any of the aforementioned sanctions.

My company grants the employees extra-legal holidays on top of their legal holidays. What does the law state with regard to those days?

The Belgian legislation does not provide for a legal framework when it comes to extra-legal holidays. The practical consequence is that you as an employer can determine the playing field and can consequently state that extra-legal holidays can be carried over. We recommend to determine the rules in the working regulations of the company.

New since 2024: final settlement deduction of holiday certificate in December for new white-collar employees

As explained in our newsletter, the procedure for deducting single holiday pay for new white-collar workers has been changed in 2024. From 2024, this deduction happens in two phases:

1. During the year: each time a white-collar worker takes a holiday accrued with his previous employer, with his new employer, the white-collar worker will receive his normal fixed salary, but with a deduction of 90% of the fixed salary for the holidays taken during that month.
   
2. December: final settlement of single holiday pay, taking into account the amounts of single holiday pay mentioned on the holiday certificate, minus the amounts already deducted during the year.

The result of this final settlement may be a refund or an additional deduction. This will be clear in the December pay slip.

How can I keep an overview of the outstanding holidays of my employees?

If your HR department does not have an own calendar to keep track of the holiday entitlement of the employees, Pro-Pay can assist with a practical tool. Your Easy Absence Planner (YEAP) can assist you in the management of all types of absences, including all sorts of leave. It is of the greatest importance to report all the absences of your employees in view of your legal obligations as an employer and the entitlement of the employee to certain social benefits.

With YEAP, the management and tracking of the holiday counters of your employees is really straightforward.

Action!

• Provide your employees with an overview of their outstanding legal holidays.
• Remind them of the rules regarding taking and carrying over holidays.
• If this has not yet been dealt with: determine the rules regarding taking and carrying over extra-legal holidays, preferably in the working regulations.

Foreign employees who are not European Economic Area (EEA) citizens need a work permit or a single permit to work on the Belgian territory, unless they are exempt from this requirement.

The authority to grant a work permit or a single permit has been regionalized and each region can determine its own conditions to grant a work permit/single permit. The Brussels Region has amended its rules regarding the single permits, with effect on 1 October 2024. The most important changes are the following:

1. New definition of “remuneration”

Certain categories of employees must reach a minimum salary threshold. The minimum threshold was previously an annual amount, which did not only include fixed salary but also other payments and benefits, such as double holiday pay, 13th month premium, company car, meal vouchers, etc.

The Region has now changed its definition of “remuneration”:

• The minimum threshold is now a monthly amount, calculated based on a percentage of the monthly average gross salary in the Brussels Region;
  
• The only remuneration taken into account corresponds to Code 1 of the DMFA declaration (= quarterly declaration to the Belgian social security). The following salary elements fall under Code 1: fixed monthly salary, benefit in kinds such as laptop, mobile phone, housing and overtime pay for example. Other elements such as double holiday pay, 13th month, etc. are therefore excluded from this monthly threshold. Taking into account the above, the Region has determined new salary thresholds (see below).
  
• Employers will no longer be required to send out individual accounts and pay slips to the authorities in the framework of yearly controls, as the latter will carry out this control themselves via the social security database.

The new thresholds for the various categories are the following:

The amounts will be updated automatically every year on 1 January.

! This also applies for seconded employees, for whom the overall gross monthly salary (Belgian taxable salary and foreign social security) should be looked at. Since no DMFA is declared for seconded employees, the Region will control the salary thresholds punctually on an individual basis.

The above changes apply to every application and renewal introduced as from 1 October 2024.

According to the Region, most of the current single permits should comply with the new thresholds. The Region will apply a pragmatic approach if this not the case: they will mainly verify whether the other conditions are complied with. We however advise employers to adapt the monthly salaries to the new thresholds.

2. New required application documents

The Region now requires new documentation for certain types of single permits categories, such as a description of the open position or an organizational chart of the company.

3. Publication of the job offer on the Actiris website

From now on, it will be required to publish a job offer five weeks in advance via the Actiris services and to obtain a notice from Actiris regarding the result of these steps, specifying that the position could not be filled on the local employment market.

However, this specific procedure must not be followed for certain categories (highly qualified staff or ICT e.g.) or for functions included in the list of bottleneck professions published by Actiris.

4. Single permits for indefinite duration

Employees may now apply for a single permit for indefinite duration after 30 months covered by an authorization to work issued by the Brussels Region (vs. 4 years before).

Internships will now be taken into account to reach the 30 months.

5. Changes regarding the European blue card

The new Brussels legislation takes into account the new “European Blue Card-Directive”.

As a consequence:

• It will be easier for employees to switch from an employer to another;
  
• A higher degree education degree is no longer required for employees working in the ICT sector. Professional qualifications may be demonstrated by proof of professional experience (via a CV or training e.g.).

6. Automatic withdrawal of the authorization to work upon termination

In the event of termination, the employer previously had to ask the Region to withdraw the authorization to work. This will now happen automatically as the Region is able to access the Dimona declarations.

! Action points:

• Check the salary thresholds of your employees working with a single permit in the Brussels region to make sure they are aligned with the new point of view of the Brussels’ authorities.
  
• Make sure your recruitment team is aware of the new thresholds when recruiting foreign staff in need of a single permit.
  
• If you are a client of Pro-Pay’s immigration team, we will audit your file in the coming weeks and reach out to you to discuss our conclusions.

Do not hesitate to contact our legal department for a second opinion on the comp & ben package of your staff or for more information at the following e-mail address: legal@pro-pay.be.

On 2 September 2024, the Royal Decree that establishes the rules regarding the electronic submission of the annual training plan entered into force. It’s therefore time to briefly reiterate what the annual training plan is (see our most recent newsletter on this topic) and what this obligation to submit the training plan electronically entails.

What is the annual training plan?

Since the Labour Deal, employers with 20 or more employees are required to draw up a formal training plan annually.

The formal training plan must include the following:

• an overview of all formal and informal trainings offered within the company.
  
• the target groups of employees for whom the training is intended, with special attention to individuals from risk groups (such as recently dismissed employees and employees over 45 years old), as well as to the equal treatment of men and women.
  
• an explanation of how the training plan contributes to the overall investments in training.

The training plan must be drawn up annually by 31 March at the latest. Consequently, your Works Council, or in absence thereof your union delegation, or in absence thereof your employees, must receive the draft by 15 March at the latest.

New obligation: the electronic submission of the annual training plan

Before the Royal Decree entered into force, it was not yet specified which authority the formal training plan needed to be submitted to. Therefore, it was recommended to temporarily keep the plan within the company.

In the Royal Decree that entered into force on 2 September 2024, the Federal Public Service for Employment, Labor and Social Dialogue (FPS Employment) was designated as the competent authority for the submission.

The submission must be done online via the application https://www.transfer.werk.belgie.be/.

Deadlines?

• Training plans for the years 2023 and 2024: must be submitted no later than 6 months after the Royal Decree entered into force, meaning by 1 March 2025 at the latest.
  
• Future training plans: must be submitted within one month after the plan enters into force.

If you have any further questions about this topic, do not hesitate to contact us via legal@pro-pay.be.

As 2024 is gradually coming to an end, we want to provide you with an overview of the Belgian public holidays for 2025, and a reminder of the rules applicable to replacement days.

Public holidays in 2025

Applicable rules

As a rule, employees cannot work on public holidays in Belgium.

If a public holiday falls on a Sunday or another day which is normally a non-working day (usually a Saturday), it must be replaced by a replacement day on a normal working day. The employer, however, is obliged to pay the employee a normal salary for that holiday. In the list above, the public holidays that fall on a non-working day in the course of 2025, have been marked in bold. Employees are entitled to one replacement day in 2025, for All Saints’ Day (1 November).

The law of 4 January 1974 provides for the manner in which replacement days should be determined. In theory, the Joint Industrial Committee competent for each sector may decide when replacement days shall fall, but we do not see this very often in practice. If the Joint Industrial Committee has not taken its decision before 1 October 2024, each company may decide for itself when the replacement days for its employees will fall in 2025. The company may take that decision in one of the following ways:

• By the Works Council;
  
• If the company has no Works Council, by agreement between the union representation and the employer;
  
• If the company has a Works Council nor union representation, by agreement between all the employees and the employer;
  
• If no agreement can be reached for the whole company, individual agreements may be drawn up between the employer and each employee.

If replacement days cannot be decided upon using one of the solutions above, they automatically fall on the next normal working day following the public holiday (usually a Monday).

Employers must inform their employees of the replacement days for 2025 by displaying a signed and dated document on the company premises before 15 December 2024. You can obtain a template of such a document from your payroll business partner.

Each year in January, salaries are adjusted to the cost of living for employees of companies subject to Joint Industrial Committee 200 (JIC 200). In Belgium, this is referred to as the indexation of salaries.

This indexation is a mechanism whereby salaries are linked to the evolution of the flattened health index. The monthly salary is more specifically increased by a percentage equal to the inflation rate of the previous calendar year. The indexation system as foreseen by JIC 200 is applicable to all employees falling under the scope of this Joint Industrial Committee.

Based on current forecasts, we expect that the indexation percentage for January 2025 will be approximately 3.52%.

We will inform you of the final index percentage by early January 2025 at the latest.

In the context of the new legislation regarding training rights (see our most recent newsletter), companies are now required to fill in the Federal Learning Account (“FLA”). In this newsletter, we provide an update and explain how we can assist you in fulfilling this obligation.

What?

The Federal Learning Account (“FLA”) is a digital web application that facilitates the exercise, management, and registration of individual and sectoral training rights.

! This digital web application is mandatory for all employers, regardless of their size, and for all employees.

In this tool, every employer must register all the training courses followed by employees.

Sigedis, the government partner managing this FLA tool, will supplement the training rights at the end of November for employees whose training rights have not yet been entered. You may have already been informed about this by the NSSO via a message in your e-Box.

Starting from 2025, Sigedis will automatically complete the training rights, and you, as an employer, will only need to approve or amend them.

When?

By November 30, 2024, at the latest, every employer must have registered the training courses that employees have followed between January 1 and September 30, 2024, in the FLA. This includes both formal and informal training, provided it is directly related to the work or function.

From December 1, 2024, the employer must register each training followed no later than one month after each quarter.

Employer Obligations?

• In addition to registering the completed training, the employer must also ensure that the employee data is up-to-date. For example, each new employee must be registered within 60 calendar days from the date of employment.
  
• Employees have easy access to this tool by logging in at www.mycareer.be
  
• Sigedis—the government partner managing this tool—will inform employees about the FLA upon employment and then (at least) once a year. Employees who do not have a registered email address with the government must receive this information through the employer using a standard document provided by Sigedis
  
• The employee can ask the employer to correct any data that is incorrect or missing in the FLA.

How to Register?

Registration in the FLA can be done in various ways, but for employers with fewer than 50 employees, manual entry seems to be the most suitable option.

What can Pro-Pay do for you?

For employers with no more than 50 employees, we can enter the training data of your employees into the FLA if you provide us with a specific mandate with the NSSO. You provide us with the training data of all employees via an Excel template that we will send to you. We will then take the necessary steps to enter this data into the FLA.

If your company has more than 50 employees and you do not yet have a L&S system, we can connect you with one of our partners who can help develop a L&S system with automatic registration in the FLA.

If you have any questions about this service or the associated fees, please do not hesitate to contact us at legal@propay.be