Shift and night work: intensification and tightening of SPF controls.

The year 2022 was marked by significant activity by Public Authorities in the field of exemptions from withholding tax payments for shift and night work :

• on the one hand, the relevant legislation was strengthened with effect from 1^Er April 2022;
• on the other hand, the Administration (SPF Finance) has increased its controls in this area, by applying strict legal interpretations of the articles of the Tax Code.

The main objective of these measures was to limit abuse which had been perpetrated and detected in the past. Although this objective is commendable and necessary, the strengthening and tightening of controls, based on imprecise legislation and terminology, resulted, in 2022, in recoveries, sometimes significant, that may endanger the annual result of taxpayer companies, or even their continuity.

Because of its expertise in this field, ABV Development can help, prior to the checks, to reduce tax risk of a recovery.

In the event of an audit, ABV Development also puts its experience in the field, in order to facilitate the process and provide all the information relevant to the smooth running and, thus, reduce the risk associated with recovery.

Companies that employ shift workers or night workers may, under certain conditions and formalities, qualify for a partial exemption from the withholding tax withheld.

This provision constitutes significant financial assistance for the taxpayer company, as this exemption may reach up to 22.80% of the taxable remuneration of the workers concerned (25% in the case of a continuous work system).

However, as this provision has been applied erroneously/abusively by a good number of companies (xxx Court of Auditors), the legislator has strengthened the legal texts (C.I.R. 92, Circulars) in this area. So, since the 1^Er In April 2022, minimum bonuses were introduced: the team bonus awarded must amount to at least 2% of the gross contractual hourly wage and 12% for night work.

The formalization of these bonuses must also, from 1^Er April 2024, be effective through registration in a collective bargaining agreement, in the employment regulations or in the employment contract. Temporary employment companies have also been imposed on new conditions: they will only be able to apply staff exemptions if their customers give their explicit consent.

Moreover, as ABV Development was able to observe in 2022, the Administration (SPF Finance) has substantially strengthened its controls in this area, with particularly severe consequences for some of the companies concerned: tax adjustments (obligation to repay all or part of the amounts exempted) which may represent a substantial part of annual profits.

In some aspects, the current legislation being imprecise and the case-law insufficient, legal texts are subject to variable interpretations; the final result of an audit for the company may be substantially affected.