The Belgian tax authorities recently published Circular Letter 2025/C/70 to update the rules on lump-sum allowances provided by employers for employees’ foreign business trips.
Under Belgium’s tax laws, employees on foreign business trips may receive a flat-rate daily allowance to cover incidental travel expenses that is exempt from taxes and social security contributions.
Lump-sum allowances for foreign business trips can be considered costs to the employer if they do not exceed the daily lump-sum allowances applied by the Ministry of Foreign Affairs for seconded employees.
The rules distinguish between short foreign business trips of a maximum 30 calendar days (Category 1) and long foreign business trips lasting more than 30 calendar days but less than 24 months (Category 2). The lump-sum allowance covers lunch and dinner costs, drinks and snack costs, local travel costs, telecommunication costs, and other small expenses.
The circular sets out new allowance amounts applicable as of 1 August 2025, with a list of the updated amounts for each foreign jurisdiction. But the Belgian tax authorities also provide more clarifications in the circular regarding the minimum duration of the short foreign business trip and the allowances for the day of departure and the day of return.
Valerie Audenaert
BDO in Belgium
Background
Under Belgium’s tax laws, employees on foreign business trips may receive a flat-rate daily allowance to cover incidental travel expenses that is exempt from taxes and social security contributions.Lump-sum allowances for foreign business trips can be considered costs to the employer if they do not exceed the daily lump-sum allowances applied by the Ministry of Foreign Affairs for seconded employees.
The rules distinguish between short foreign business trips of a maximum 30 calendar days (Category 1) and long foreign business trips lasting more than 30 calendar days but less than 24 months (Category 2). The lump-sum allowance covers lunch and dinner costs, drinks and snack costs, local travel costs, telecommunication costs, and other small expenses.
New Rules
The circular sets out new allowance amounts applicable as of 1 August 2025, with a list of the updated amounts for each foreign jurisdiction. But the Belgian tax authorities also provide more clarifications in the circular regarding the minimum duration of the short foreign business trip and the allowances for the day of departure and the day of return.
- With retroactive effect to 1 January 2025, it is no longer required that the minimum duration of a one-day business trip exceed 10 hours.
- Until now, the lump-sum allowance for the day of departure and return in the case of business trips of more than one day was limited to 50%. As of 1 January 2025, this will no longer be the case. However, when the employer also pays or bears the cost of lunch, the amount of the allowance needs to be decreased by 35%. The same principle applies to dinner costs (45%) and to other small expenses (20%).
Valerie Audenaert
BDO in Belgium