Corona update - the support from the Federal Government

1. Measures concerning the organisation of work

1.1 Temporary unemployment due to force majeure

"I am not able to employ the staff anymore. What now?  I'm a quarantined employee. What now?   I'm detained abroad in quarantine, what now? Do I have to continue paying the labour costs?"

Temporary unemployment due to force majeure following the coronavirus is a measure that ensures that the interruption of the activity of the employer does not imply the termination of employment contracts. The labour costs do not have to be borne by the employer. 

The unemployment office RVA/ONEM pays an allowance of 70% of a the average salary, but capped at € 2,754.76, to the employees who can no longer be employed. The government has decided to increase the amount of the allowance by € 150 per month (€ 5.63/day). This measure is valid until 31 August 2020.  

During the coronavirus period, no distinction is made between temporary unemployment due to force majeure and unemployment for economic reasons nor between blue-collar or white-collar workers. 

Only one procedure for both blue-collar and white-collar workers should be followed to apply for temporary unemployment due the corona crisis. A special application form is made available by the RVA/ONEM. 

You can find more information about this by clicking here.

1.1 General measures

• The creation of a special Corona unemployment scheme, which consists of a transition from temporary unemployment due to corona force majeure to regular economic unemployment. This ‘transitional’ economic unemployment can be used if the company experiences a 10% drop in turnover. Employees will attend 2 days of training per month of unemployment and will continue to receive 70% of their last capped salary.
• Companies undergoing restructuring or in difficulty will be able to reduce working time pending the resumption of their normal activities and to avoid redundancies, either by means of a collective reduction in working time, or by means of the time credit or end-of-career time credit, for which access with benefits will be lowered from 57 to 55 years of age.
• Extending access to corona parental leave. This scheme will run until 30 September with benefits that are increased to 150% for single-parent families and families with a disabled child.
• The costs incurred by people working from home will be more easily reimbursable, up to a maximum of EUR 127 per month, with a view to achieving a better work-life balance in the future.

2. The bridging right for the self-employed

"I am the manager of a company whose activities have been stopped. I am self-employed and my activity has been interrupted, what now?"  

The government has decided to accommodate these self-employed persons and to provide a replacement income by easing the access to the so-called bridging right.

Self-employed persons who, due to quarantine, a ban on returning to Belgium or indirectly due to the coronavirus, have to interrupt or stop their activities, can benefit from a financial advantage as from the 7th day.

Be aware! During the interruption of the activity, it is still allowed to perform actions necessary for the survival of the company, such as making quotes and invoices or answering emails and telephones.

Which self-employed persons?

• The self-employed whose main profession is to be self-employed, the starting self-employed, the assistants and the assisting spouses. The student-self-employed persons are excluded from this rule.

How much is the allowance? The allowances are composed as follows:

• The self-employed whose self-employment is their secondary profession, and who, during the reference year (three years ago), have an annual taxable income of between € 6,996.89 and € 13,993.77.
  
  How much is the allowance in this case? The maximum allowance is € 645.85 per month for a self-employed person without family or € 807.05 per month with family.

This bridging right is also available until 31 August 2020 

3. Postponement and exemption of advances on social security contributions

"Due to the corona crisis, I am not or no longer able to pay my advances for the time being. What to do now?"  

The government provides for the possibility to request postponement or exemption of social security advances.

3.1 Postponement of payment of social security contributions

All self-employed persons can request a postponement of the payment of the advances on the social security contributions for a period of one year without any increase being charged and without impact on their rights. 

This means that the contributions of the first quarter have to be paid before 31 March 2021 and the contributions of the second quarter before 30 June 2021. 

This measure only relates to provisional contributions for the first and second quarter of 2020.

The application must be made in writing through the social insurance fund before 15 June 2020.

3.2 Exemption from social security contributions

Self-employed persons who cannot pay the advances at all can apply to be exempted from the payment of these social security contributions. 

The exemption from social security contributions can be granted in whole or in part.

This exemption can be requested for the provisional contributions or for the contribution supplement after regularisation of the professional income.

Which self-employed persons?

The self-employed person who is self-employed as his main profession and his assisting spouse. This means that the measure does not apply to self-employed persons whose self-employment is a secondary profession, student self-employed persons with reduced contributions, and self-employed persons with a similar secondary profession.

Which option exists for all self-employed persons?

A reduction of the social security contributions for 2020 can be granted to all self-employed persons regardless of whether they are in a main occupation or a secondary occupation if their professional income is below one of the legal thresholds.

When your payment of provisional social security contributions or regularisation contributions is too late?

You will automatically receive a waiver of increases without any request. 

3.3 Postponement of company contribution 2020

The deadline to pay the company contribution, which should normally be paid before 1 July each year, is postponed until 31 October 2020 at the latest. An application for a deferral of payment is not required. 

4. Deferral of social security contributions for employers

"My company is experiencing financial difficulties due to the corona crisis which makes the payment of employer contributions difficult or currently impossible."

Employers can postpone the payment of the social security contributions for the first and second quarter 2020 until 15 December 2020. 

The social security office makes a distinction between two categories of employers: 

4.1 Employers who are automatically entitled to defer their payment 

This category of employers relates to the businesses that are obliged to close down, i.e.: 

• Catering industry;
• Cultural, festive, recreational and sports sector;
• All shops and stores closed in accordance with the provisions of the relevant ministerial decrees, with the exception of:
  • Food shops, including night shops;
  • Pet food stores;
  • Pharmacies;
  • Newspaper shops;
  • Service stations and fuel suppliers

Via the application "coronacrisis check social security deferred payment", these business are given the opportunity to check whether the deferral of payment has been granted correctly (https://www.uitstelrszbetalingen.be). 

4.2 Employers who have to report their closure

Businesses that are not obliged to close down, but that have taken the decision on a voluntary bass to close down have to report their closure to the social security office. These are, for example, businesses that are forced to close because their suppliers or customers have been forced to close. The social security office considers the following businesses: 

• Non-essential businesses, closed because they are unable to apply the sanitary measures;
• Businesses that, notwithstanding that they are not obliged to close, have decided to close down completely, for reasons other than not being able to apply the sanitary measures. These include businesses that have had to close because of the closure of their suppliers or their customers.

These businesses are required to enroll by means of an electronic declaration on honour (D) (F).

4.3. Businesses which are not completely closed down but whose activities are sharply reduced 

Employers, who have not been forced to close their business, but who nevertheless see their economic activities significantly reduced in respect of the 2nd quarter of 2020, can also apply for a payment schedule to pay their employer's social security contributions. To this end, they must file a declaration on honour by means of an electronic form in which they declare that the corona crisis will result for their company:

• either in a reduction of at least 65% of the turnover declared in the VAT return for the 2nd quarter of 2020 compared to the turnover declared in the VAT return for the 2nd quarter of 2019 or the 1st quarter of 2020; or
• in a reduction of at least 65% of the payroll declared to the NSSO for the 2nd quarter 2020 compared to the 2nd quarter 2019 or the 1st quarter 2020.

5. Tax related measures

5.1 Extension of deadlines for filing tax returns

The federal government has decided to grant extensions of the deadlines to file tax return for personal income tax, corporate income tax, tax for not-residents and VAT.

What does this measure actually contain?

• The obligation to file tax returns with regard to personal and corporate income tax and the tax for non - residents is postponed until 30 April 2020.
  
  This is an additional deadline that only applies for tax returns due at the latest between 16 March and 30 April 2020. 
  
  
• The extension of the deadlines for filing VAT returns can be summarised as follows:

Periodic VAT Tax returns

A start-up or those who have an agreement to receive  a monthly refund, that would like to benefit from the monthly refund of their VAT credit, will be granted an extension of the deadlines for the February 2020 VAT tax return  until 3 April 2020, instead of only until the 24th of the month following the relevant period.

Intracommunity declarations

5.2 Deferral of payment of taxes

The government grants an automatic two-month deferral of the payment of personal income tax, professional withholding tax, VAT and corporate income tax.

The deferral applies as follows:

• VAT

• Professional withholding tax

• Personal income tax - corporate income tax - legal entity tax - not – resident tax

An additional period of two months, on top of the normal deadlines, is granted for the payment of the personal and corporate income tax, non-residents' tax and legal entities' tax, without late payment interest being charged. This measure applies to taxes, assessment year 2019, established as from 12 March 2020.

The announced support measures also apply with respect to debts regarding personal or corporate income tax, even if they were established before 12 March 2020.Additional payment terms, exemption of late payment interest and/or the waiver of fines for late payment are possible, subject to making a request.

5.3 Accelerated VAT refunds 

Those who submit monthly VAT tax returns - including those who do not have an agreement for  monthly refund and those who are not considered to be 'starter' either - will, subject to certain conditions, be able to benefit from an accelerated refund of the VAT credit on their current account (effective as from 31 March 2020).

5.4 No VAT on donations of medical supplies to hospitals and additional deduction for certain extra costs

Donations of medical supplies to hospitals and care institutions will not be subject to VAT. 

Also, will it be possible to deduct as professional expenses, temporary extra costs incurred for, for example, the production of medical supplies.

5.5 Alcohol and alcoholic beverages 

The General Administration of Customs and Excise has decided to grant an additional payment term with regard to the payment of excise duties, the levy for packaging for alcohol, alcoholic beverages and the VAT. 

Who is entitled to what? 

• With regard to the excise duties and the levy for the packaging for alcohol and alcoholic beverages:
  • Credit account holders are automatically granted a payment term of four weeks instead of one week.
  • The non - credit account holders will have until the Thursday of the fourth week to submit their return AC4

Who is not entitled? The temporarily registered consignees are not affected by these measures.

From when? This measure applies to declarations made as from 21/03/2020.

• With regards to VAT:
  • Credit account holders will automatically receive a payment term of four weeks instead of one week.

The measures apply until 30 June 2020.

For credit account holders, all declarations submitted in PLDA (PaperLess Douane en Accijnzen / PaperLess Douanes et Accises) before 1 July will automatically benefit from the extension of the payment term.

For those who do not hold a credit account, all deliveries made before 1 July will automatically benefit from the measure to extend the deadlines period for filing   and payment.

5.6 Covid-19 tax shelter system

A new Covid-19 tax shelter system, which is temporary, until the end of the year and is open to all SMEs that have been affected by the Covid-19 crisis.

5.7 increased investment deduction (25%)

An increased investment deduction (25%) for investments made between 12 March and 31 December 2020.

5.8 100% deduction of costs related to events and catering

An increase from 50 to 100% for the deduction of costs related to organising events and catering until 31 December. This avoids a massive postponement of events until next year, which could cause even more problems for the already badly affected sector.

5.9 Suspension of VAT advance till January 2021

Suspension of the VAT advance for December 2020. As a reminder, companies are normally required to pay an advance before 20 December and this will be postponed by one month. The aim is again to improve companies’ liquidity.

5.10 Tax deductions for donations

An increase from 10 to 20% of The share of net income eligible for tax deductions for donations will be increased from 10 tot 20%. At the same time, the tax reduction for donations to approved institutions will be increased from 45% to 60% in 2020. The latter provision is aimed in particular at the voluntary sector and will support NGOs and non-profit organisations whose activities of general interest have been severely affected by the crisis.

6. Payment in installments

Businesses (individuals and legal entities with an enterprise number) that are affected by the coronavirus crisis and have payment difficulties can apply for financial support with the tax authorities FOD/SPF Finances in the form of a plan to pay taxes in installments.  

This installment plan relates to VAT, withholding tax on professional income, personal income tax, tax on legal entities and corporate income tax. 

The eligible businesses can request ease of payment of VAT, withholding tax on professional income, personal income tax, corporation tax and legal entity tax without being exposed to any fines or interest on late payment. 

The eligible business must demonstrate that it is experiencing financial difficulties as a result of the coronavirus, e.g. as a result of a drop in turnover, customers, orders or as a result of being part in a cascade of problems with their partners. 

The application must be submitted separately for each debt before 30 June 2020 (i.e. not for each measure) to the regional tax recovery centre of the municipality where the business is located.

7. Exemption from tax on regional aid

At the press conference on 20 March 2020, the government indicated that the aid measures (premiums, etc.) would not be taxed at federal level. 

8. Measures with respect to the agricultural and horticultural sector

The number of days of occasional work in the agriculture and horticulture are doubled for the year 2020. On days of occasional work the employers in the agriculture and horticulture sector can take advantage of the system of occasional work whereby contributions are calculated on a fixed daily amount. 

Actually, the following applies:

• the maximum number of days for the agriculture sector increases from 30 to 60;
• the maximum number of days for the horticulture sector increases from 65 to 130;
• for chicory and mushroom growers, the additional 35 days are increased to 70. They will thus be able to use the system for a maximum of 200 days in 2020.

10. The working hours worked by a student in the second quarter of 2020 neutralized

Students working with a student contract generally pay only a solidarity contribution of 2.71%. However, this "privileged regime" only applies to 475 hours of work per calendar year (474 in reality).

Those who work more hours are subject to normal social security contributions.

Due to the corona crisis, the government decided not to take into account the working time of students in the 2nd quarter of 2020 for the calculation of the 475 hours per calendar year. This will allow a higher number of students to be deployed to work in essential sectors without the risk of leaving the special NSSO regime. In this way, the workforce may be strengthened in "critical" sectors, such as the distribution sector or the food sector.

11. Tax exemption for overtime on a voluntary basis

Belgian labour law provides for the possibility to work overtime on a voluntary basis. 

Following the corona crisis, the government decided to exempt these voluntary overtime hours (220 hours) in the so-called "critical" sectors from taxation.

12. Measures for the horticulture, agriculture and forestry sectors

Unemployment allocation cannot be cumulated with a "salary". Unemployed persons receiving unemployment allocation must therefore, in principle, be without work and without pay.

However, in order to meet the needs of the horticulture, agriculture and forestry sectors, which are suffering from an acute shortage of workers as a result of the corona crisis, the Government has decided to allow the employment of temporarily unemployed workers who then will retain 75% of their unemployment benefit. For a full day's work, for example, they will receive the normal salary linked to the function performed as well as an amount equivalent to 75% of the temporary unemployment benefit.

13. Access of asylum seekers to the labour market

Asylum seekers are allowed to enter the labour market provided that they have applied for this status with the “Commissariat Général aux Réfugiés et aux Apatrides” (CGRA).

14. Successive short-term employment contracts in crisis sectors

The conclusion of successive fixed-term contracts is limited by labour law.

Following the corona crisis, the government decided to relax this rule by allowing successive short-term fixed-term contracts for critical sectors for a period of three months and a minimum of 7 days.

15. Relaxation of the rules on the posting of workers

The possibility of placing employees at the disposal of third parties is strictly regulated by Belgian and even European labour law.

Following the corona crisis, the government decided to relax these rules for the posting of workers to employers in the so-called "critical" sectors.

16. Specific support measures for horeca and industries in difficulty

Four specific support measures have been taken for industries in difficulty, including the hotel and catering industry, order to mitigate the socio-economic impact of a gradual resumption of activity. These are:

• An extension and improvement of the bridging right for the self-employed until 31 August 2020, with a possible extension until 31 December 2020;
• At the same time, an extension of temporary unemployment until 31 December 2020.
• To improve the financial situation of hospitality establishments, VAT on all services, except alcoholic beverages, will be reduced to 6% until 31 December 2020;
• In severely affected industries that had to resort to temporary unemployment, an agreement was reached to grant a partial exemption from payment of withholding tax for the next three months. This will also be an incentive to have employees who are currently temporarily unemployed return to work.

17. Measures supporting the spending power

Attention was also paid to Belgians’ spending power. The Federal Government and the ten parties want to create a positive dynamic, first and foremost and as a matter of priority for the people, but also for the economic activity of our country. The measures include

• A consumption voucher of EUR 300 aimed at the worst affected industries. This voucher can be granted by employers for the purchase of goods and services in the hospitality industry, the cultural industry, etc. This cheque is 100% deductible and tax-free.
• Additional support of 6 times 50 euros per month to living wage earners, people with disabilities and people entitled to an IGO/GRAPA (income guarantee for the elderly).
• Every resident of our country will get a rail pass (NMBS/SNCB) for 10 train rides valid from 1 July to 31 December. The supplement for taking bicycles on the train will be lifted temporarily.

Please, do not hesitate to contact us. It goes without saying, that we can assist you, first of all to assess your legal position and to consider what action you can or should take in this crisis. You can always contact us on 02/747 40 07 or CoronaTaskforce@seeds.law. 

Information about regional aid by clicking here.