New lump sum expense allowances for business trips

When an employee goes on a business trip, it entails various costs.

There are hotel costs. These costs are generally paid directly by the employer or by the employee and reimbursed by the employer. In principle the employer will only reimburse genuine professional costs. And these costs are exempt from all taxes and social security contributions. But this requires not only evidence confirming the amount of the hotel costs, but also evidence confirming the professional nature of the trip. If an employer paid a hotel bill for an employee’s private trip, it would constitute a benefit in kind. And it would be subject to normal tax withholdings and social security contributions.

The Belgian National Office for Social Security’s instructions for employers include a lump sum evaluation of hotel costs in Belgium. But this lump sum is only EUR35 per night. This is to cover dinner, the hotel room and breakfast.

When it comes to reimbursing costs for travelling outside Belgium, a safe option for an employer is simply paying the same expense allowances as those paid by the Belgian state to civil servants. On a regular basis, a Ministerial Decree is published in the Official Journal with two lump sum amounts for the most common business trip destinations:

• A maximum amount for accommodation costs per day.
• A maximum amount of the various small expenses resulting from a business trip. This includes the costs for lunch and dinner, drinks and snacks, local transportation, telephone costs and also other small cash expenses (eg tips in countries where giving tips is expected).

The lump sum expense allowances per destination do not include costs for travelling to the destination and back. These costs are reimbursed separately.

The most recent list is included in a Ministerial Decree of 10 January 2023. This Decree replaces the similar list included in a Ministerial Decree of 2 July 2018. When comparing the 2023 amounts with the 2018 amounts, the differences are in most cases rather small.

The daily lump sum expense allowance varies in relation to the cost of living of the destination in question. In the new amounts included in the Ministerial Decree of 10 January 2023, the lowest amount for small expenses is EUR36 per day and applies to Macau. The highest amount is EUR120 per day, which applies to Bern and Singapore. The lump sum amount for accommodation varies from city to city, with the scale going from EUR80 per night in Sarajevo up to EUR390 per night in Washington, DC.

The full amount of the lump sum expense allowance can only be granted if the employer does not cover the same costs in another way, notably by allowing the employee to submit an expense note for the same costs or by providing the employee with a credit card linked to the employer’s bank account.

The lump sum daily amounts should be reduced by 35% if the employer pays the costs for lunch and by an extra 45% if the employer pays the costs for dinner. If the employer pays for both lunch and dinner, only 20% of the daily amount for small costs can be granted, as well as the amount per night for accommodation.

The 2018 list also stipulated that 15% of the daily amount was for breakfast, and the remaining 5% for various small cash costs. The 2023 list no longer includes this 15% and 5% evaluation and specifies that the cost of breakfast is included in the accommodation cost per night.