Amendments affecting Belgian tax measures – shift work and night work (June 2024)

As the Belgian Federal Government progresses in finalising the federal budget, attention is drawn to a new law outlining significant changes in taxation. This law introduces some novelties in terms of the investment tax deduction, partial wage withholding tax exemption for shift work and night work, and the innovation income deduction. 

The text has been published on 29^th of May and is expected to enter into force on the 8^th of June 2024. 

As one of the important tax measures resulting from this budget agreement relates to specific changes to the Belgian fiscal measures FI Group supports you with, allow us to give some insights in to what you can expect in terms of withholding tax. 

Want to know more about? 

• The investment tax deduction 
• The innovation income deduction 

Wage withholding tax exemption for shift work and night work 

Overview of current tax regime 

The partial exemption on wage withholding tax is a boon for employers, offering financial relief while rewarding employees. It covers various scenarios, including research and development (R&D), night and shift work, and works in immovable property. 

Specifically, the partial withholding tax exemption for night and shift work is a percentage of the employee’s taxable remuneration that qualifies for the benefit. This percentage is:   

• 22.8% for night or shift work that meets the legal conditions;   
• 25% for night or shift work performed in a full-time work system.   

Night or shift work is work performed according to a particular work regime that differs from normal day work. There are different types of night or shift work, depending on the sector, the company and the employee’s position. The main forms are:   

• Night work: work performed between 8pm and 6am. Examples of sectors where night work is allowed are hospitality, healthcare, security and transport.   
• Shift work: work performed according to a fixed or variable hourly schedule, where workers regularly relieve each other at the same work station. There are different types of shift work, such as two-shift, three-shift, four-shift, five-shift, etc. Shift work may or may not involve night work.   
• Full-continuous labour system: a specific form of shift work, in which employees work 24 hours a day and 7 days a week, with a regular rotation of shifts. A full-time labour system requires a minimum of four shifts, with each shift performing night work at least once a week.   

Anticipated changes 

The new law introduces several adjustments to the partial withholding tax exemption for night and shift work. These include: 

• Exclusions and modifications: Flexibility in the requirement for successive crews to have the same scope of work, introducing alternative regimes, and revising calculation rules to ensure fairness and consistency. Employers can now choose an alternative regime where teams must carry out the same work in terms of their object, but not necessarily in terms of their scope. Because of this, the calculation rules for the exemption are revised. 
• A new calculation: Introducing a new calculation method that considers the percentage difference in the scope of work between teams, aiming to address issues of applicability and ensure compliance. With a less limitative scope, it will lead to more companies being able to apply the exemption. So, as the better you fit the criteria for this particular tax exemption, the higher the actual exemption in percentages. Or: The greater the difference in scope, the smaller the tax advantage. 

Application of the changed shift work and night work

The proposed changes to this tax measure apply with retroactive effect with the objective of securing the incentive for companies that have already applied the exemption prior to this restrictive definition by the courts and that already have an ongoing dispute with the tax administration.  

As the law has been published, businesses should prepare for changes that will reshape the Belgian fiscal landscape. The alternative regime will only apply to remuneration paid or allocated until 31 December 2026. It is therefore a transitional regime. 

FI Group has 20 years of experience and wants to support you in understanding and intercepting the available R&D+I opportunities. Our experts are at your disposal to analyse your project and to take the next steps together with you.   

Yvette Poumpalova

Alicia Borés Vall