If an employee's home office in another country is at the employer's disposal with a certain degree of permanency (fixed place of employment) and the employee carries out activities for the benefit of the business via their home office, this could constitute a ‘permanent establishment’ for the employer.
To qualify as a permanent establishment, the employer must have long term access to the employee's home office, i.e. the employer must be able to organise the company's activities from this home office.
It is important to underline that a home office does not automatically qualify as a permanent place of business since it is often not at the company’s disposal. To establish whether or not a home office constitutes a permanent establishment, aspects such as whether or not the company address is located at the home address, whether or not the employer has permanent access to the home office and whether or not the employee receives an allowance from the employer for the use of the home office, are often taken into consideration.
In addition to the existence of a material permanent establishment, there may also be a personnel related permanent establishment. This may be the case if an employee of a company based abroad works from home as an agent for the company and concludes contracts on behalf of the employer in the normal course of their business or plays a crucial role in the conclusion of contracts.
Although these exceptional circumstances make it impossible for employees to work on the basis of their regular roster or from their regular place of work, it is currently unclear whether the Belgian tax administration will adopt a pragmatic approach when assessing home offices.
If you have previously obtained a tax ruling confirming that the home office of a Belgian employee does not constitute a permanent establishment in Belgium, providing the employee’s activities are carried out from this home office for only 1 or 2 days a week, we recommend that you contact the service prior to making a decision to confirm that the validity of the ruling is not affected by the current circumstances.
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Last update: 30/04/2020
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