We recently reported on the saga that followed the Constitutional Court's ruling of February 8, 2024 on the conditions for applying the partial exemption from payment of withholding tax for employers organizing shift work (CIR/92, art. 275/5).
The ruling of February 8, 2024, had given rise to fears among many employers whose successive shifts fluctuate in size that they would simply lose the tax advantage, which can represent a reduction of 10 to 15% in the wage costs associated with shift workers.
The Minister of Finance, who was quickly approached by the employers' federations, announced in March that he would be submitting a proposal to the House to amend the tax provision in question.
On May 2, 2024, the House adopted the new provisions, the main aim of which is to introduce a 'variant bis' into CIR/92. This would allow employers whose successive teams fluctuate in size to retain the benefit of the tax advantage, but with a reduction in that advantage proportional to the extent to which the successive teams fluctuate. To put it simply: if a team of 3 workers is followed by a team of 4 workers, the tax advantage will continue to apply for the 7 workers in the 2 teams, but will be reduced by 1/7th, i.e., 14.28%. For employers with stable-sized teams, the old system will continue to apply.
This law was published on May 29, 2024, and provides for the application of this 'variant bis' with retroactive effect from January 1, 2021. This is excellent news for employers who were at risk of losing 100% of the tax advantage—particularly in the event of a tax audit—if they were unable to demonstrate that the size of their successive teams did not fluctuate.
Finally, it should be remembered that this tax measure currently affects more than 19,000 employers, generating a financial advantage for them estimated at nearly €2 billion in total.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
