Split bill rule can avoid benefit in kind for smartphones

Whenever an employer provides an employee with a free tablet, mobile telephone, telephone or data subscription that may be used for private purposes, this is considered a taxable benefit in kind. Since the beginning of this year there are fixed charges for such benefits, but in some cases it is possible for a benefit to be avoided.

Fixed benefits in kind as from 2018

A fixed amount has been established for most such benefits in kind. However, until recently, there was no fixed fee for the free provision of a tablet, mobile telephone, or telephone or data subscription. Such benefits therefore needed to be evaluated on the basis of their ‘true value’ to the recipient. This changed, thanks to the Royal Decree dated 2 November 2017, establishing the following fixed annual costs, applicable as from 1 January 2018:

  • Free provision of a tablet or mobile telephone: 36 euros
  • Free telephone subscription (land line or mobile): 48 euros
  • Free internet connection (fixed or mobile): 60 euros

The latter amount of 60 euros per year shall apply, regardless of how many devices are able to utilise the internet connection. 

Changes were necessary as the existing fixed fees (particularly with regard to social security) could not always be considered to be aligned with the market, were no longer realistic and harmonisation was lacking between the various authorities (e.g. between the tax and social security authorities. The above amendment, together with a number of new (lower) fixed fees applicable as from 1 January 2018, now harmonise and clarify the existing rules. 

An important remark is that, in some cases, the amounts must be combined. Therefore, the free provision of a smartphone with a data and telephone subscription will incur a total benefit in kind of 144 euros.

Sometimes no benefit in kind at all

Naturally, if the permitted use of the tools provided by the employer is strictly professional, no benefit in kind should be incurred. Where a system exists whereby the employee pays all private use (registered in a realistic system), then it is not necessary to declare benefit in kind. In the event of such split billing, the employer will only fund the costs as long as these do not exceed a clear limit. Any amount above the limit is then charged directly to the person receiving the benefit.

The latter point has recently been confirmed in a response from the Minister of Finance to a question raised in parliament. Furthermore, the minister not only confirmed that, in such cases, there is no taxable benefit in kind on the subscription and internet connection, but also that no benefit should be charged for the device supplied. This has also been confirmed in the past by the ruling committee – before the creation of fixed fees. It is argued that, in the aforementioned case, as the employer is no longer funding any private use of the smartphone, there should also be no taxable benefit on the device itself

This is a somewhat surprising, but clear confirmation, which is certainly to the advantage of the tax payer and therefore can only be celebrated. 

The amount beyond which any use is considered to be private (6.5 euros call costs and 1.5 gigabytes per month in the case that was submitted to the minister) does still need to be established in accordance with serious standards and criteria and, as such, must be confirmed as realistic. Indeed, in the past, the ruling committee have already determined the contrary, that a particular law could not be considered as ‘realistic’, when the facts demonstrated that in the past year the set amounts were not exceeded by the employees and therefore no charge was made for private use.

The further course of the relationship between the UK, the EU and the EEA
What impact will Brexit have on your corporate income tax?
For the time being, the United Kingdom (UK) is still part of the European Union (EU) and the European Economic Area (EEA). The UK has since been given until 31 October 2019 at the latest to implement Brexit. This means that cross-border transactions with the UK continue to fall within the scope of EU directives. However, after Brexit, the UK will no longer be able to rely on these directives. This
Less strict circular for catering sector
New circular regarding the VAT rate for restaurant and catering services
On 1 January 2010, the VAT rate for restaurant and catering services was reduced to 12%. This rate only applies to food. Drinks (including non-alcoholic beverages and coffee and tea) are still subject to the standard VAT rate of 21%. On 23 December 2009, the administration published an explanatory note in which it detailed how an overall price for a menu (including drinks) needed to
From now on, also 'high' fixed cost deductions for self-employed persons
Personal income tax return form AY 2019: several new features explained
From now on, also 'high' fixed cost deductions for self-employed and other changes  The new personal income tax return form for assessment year 2019 was published on 7 April, the starting shot for the annual tax return race. For the Flemish tax return, "only" 6 codes have been added, and for the Walloon and Brussels tax returns, "only"
Does the new definition of a company have any consequences for your organisation?
Broader requirements for registration with the CBE - clarification for unincorporated companies
In a previous article, we explained that the introduction of a definition of 'company' in the new Companies and Associations Code (CAC) also affects the registration with the CBE (Crossroads Bank for Enterprises). In this article, we will discuss in more detail the registration obligation for unincorporated companies.  Consequences of the broader definition of a company  With the new
Noticeable impact on tax matters
Impact of Brexit on registration and inheritance tax
The tension in the United Kingdom is palpable. In the meantime, the initial date of Brexit, 29 March 2019, has been delayed. Depending on whether an agreement will be reached or not on 29 March, UK's departure date will be moved to 12 April 2019 in case of a hard Brexit (no deal) and to 22 May 2019 in case of a soft Brexit (deal). It is clear that Brexit will have an impact on tax matters, bo
An easing-up for most SMEs
New interest deduction restriction mostly offers opportunities
As part of the reforms to corporation tax in late 2017, a new interest deduction restriction was also introduced. This is part of the second phase of the reform, meaning that it applies in principle to financial years starting on or after 1 January 2019 (assessment year 2020). The new interest deduction restriction was introduced in the transposition of the European Anti-Tax Avoidance Directive (A
Some important dates highlighted
The new Companies and Associations Code
The new company and association law had already been announced for some time, and it was approved by the Chamber on 28 February 2019. Below we give a brief explanation of some of the important dates associated with the entry into force of this new legislation.   Introduction of the new legislation  The law introducing the Companies' Code enters into force on 1 May 2019 and repea
The new rules for VAT processing of vouchers
The wonderful world of VAT and vouchers
Vouchers are a very popular marketing tool. There are various types of vouchers: discount vouchers issued by a manufacturer, redeemable at any sales outlet in Belgium, discount coupons issued free of charge by retailers, vouchers where you can get a newly launched article free of charge, gift vouchers that can be redeemed for a whole range of products or services, electronic vouchers, etc. Are yo
A showpiece, or rather a sticking plaster for a broken arm?
The Belgian fiscal consolidation regime
The general intention with the introduction of a fiscal consolidation regime was clear, namely to put the Belgian tax system back in a positive light. After all, many of our neighbouring countries have had a system of fiscal consolidation in place for many years, and Belgium consequently scored badly on this point when international groups were looking to choose an investment location. The ques
The long-term lease revival
Superficies as stealth usufruct?
A noteworthy judgement was recently handed down by the Court of Appeal of Brussels regarding the taxation of overly cheap accession in the case of superficies (23 January 2019). In the past, a number of rulings had already been made on this subject (see, inter alia, Court in Ghent of 31 October 2017). The tax authorities are clearly keen to see the end of the right of superficies, and the two judg

Subscribe to our newsletter