Did you know that fixed daily compensation can be paid to company employees and directors for short-term assignments abroad? If foreign travel is not part of their normal everyday work, that is! Here are full details on this nice little tax perk …
The first bit of good news is that the taxman and social security class flat-rate daily compensation as the reimbursement of “the employer’s specific expenses”. This means they’re not taxable either for an employee or a director, as they’re fully deductible business expenses not subject to social security contributions.
What expenses are covered?
Meals, travel in situ (taxi, metro, etc.), tips, phone calls, etc. All manner of expenses, in fact, apart from the main travel costs (plane, train, etc.) and accommodation.
What about the amounts?
Employers have two options: either to pay a flat rate of 37.18 euros per day irrespective of the destination, or to pay a higher amount if justified by the specific circumstances in the destination country. This table gives the amounts per country (based on the amounts applied by the FPS Foreign Affairs). These are index-linked annually, unlike the 37.18 euro fixed rate.
Who can benefit?
Any employee or director carrying out short-term duties abroad. By “short-term”, the legislator means any trip taking up a minimum of 10 hours (with departure and arrival on the same day) and a maximum of thirty calendar days per trip. However, when an assignment lasts less than ten hours or exceeds 30 days, the taxman may, under certain conditions, accept the application of fixed-rate compensation. Social security, however, do not take the same stance as the taxman in such cases.