Withholding tax - exemption for works and maintenance on buildings

16-03-2022

By Cassandra Popleu

Act fast – still possible retroactively up to and including 2018!

For a long time now, the reduction in withholding tax has existed for working in shifts, whereby the wage cost is reduced. As of 2018, a new exemption measure was introduced with a much broader scope so that shift work performed on construction sites also qualifies. The definition of “shift work” is given a different and much broader interpretation under the new measure, for example, working in shifts is no longer a requirement.

If your employees perform work in teams, on immovable property and at a construction site, they may therefore qualify for the application of this exemption.
In order to benefit from this exemption from withholding tax, there are four conditions (cumulative) that the company must meet.

Withholding tax - exemption for works and maintenance on buildings

Working in shifts in yards

The work must be done in one or more teams of at least 2 people, doing the same or complementary work. The FPS Finance accepts that also the employee who forms a team with the manager can give right to the application of this exemption. For the manager himself, the tax reduction is never calculated.

Withholding tax - exemption for works and maintenance on buildings

Work in immovable condition

Work on real estate must be carried out on the site. In general, this refers to all work relating to the construction, renovation, finishing, fitting out, repair, maintenance, cleaning or demolition, in whole or in part, of immovable property and the act consisting of delivering a movable asset and affixing it to an immovable property in such a way that it becomes immovable by its nature. The nature of the work is thus interpreted very broadly, so that, among other things, window washing also qualifies for the exemption. Likewise, the time spent delivering, for example, windows, tiles, kitchens or paint qualifies for the exemption.

Respecting the 1/3rd standard

To be entitled to the exemption, your employees must have worked at least 1/3rd of their working hours in shifts at worksites during the month for which the charge reduction is requested.

Withholding tax - exemption for works and maintenance on buildings

Receive minimum hourly wage

Only if the employees in the team also receive a minimum hourly wage can they give right to the application of this exemption. This minimum hourly wage is indexed annually and amounts to:
13.75 euros gross/hour (for 2018);
13.99 euros gross/hour (for 2019);
14.19 euros gross/hour (for 2020);
14.34 euros gross/hour (for 2021);
14.61 euros gross/hour (for 2022).

If you, as an employer, meet all the above conditions, then you do not have to pass on to the tax authorities a portion of the withholding tax that you withhold from your employees’ salaries. This is 3% in 2018, 6% in 2019 to 18% from 2020 on eligible taxable wages. As mentioned above, this exemption is applicable from January 1, 2018 and can be applied retroactively.