When working from home employees incur additional costs, which they usually have to pay themselves. They include additional heating during the day, increased electricity consumption and the use of a privately financed internet connection. Although these costs tend to be marginal against a background of solidarity, they are usually paid for by the employer.
This represents a tax opportunity. If these costs are reimbursed by the employer, they are considered a non taxable reimbursement (deductible for the employer, not taxed in the same way as wages for the employee). In such cases double proof needs to be provided, i.e. that the costs are specifically associated with work carried out for the employer and that the reimbursement was actually spent on them. Similar principles apply in terms of social security.
Verification of the extent of these costs will not always be easy, which is why reimbursements can also be arranged on a fixed rate basis, providing the repayment complies with appropriate standards.
The National Social Security Department (NSSO) has stipulated a maximum amount of 126.94 euro per month specifically for the reimbursement of the above mentioned costs. In previous tax related rulings the maximum amount set by the NSSO was often also maintained as a maximum amount. In addition, the costs for the professional use of the Internet connection can also be reimbursed, to the extent that they are not already borne by the employer. This reimbursement may not exceed EUR 20 per month. An allowance of up to 20 euros per month may also be provided by the employer for the use of one's own PC.
The NSSO announced that it will not accept the scheme provided for under employment law for full-time homeworking/telaying, on the basis that the employer can reimburse the costs associated with this up to 10% of the gross salary, for lockdown homeworking.
In order to obtain tax certainty that this reimbursement will be considered as a reimbursable cost proper to the employer, a prior decision (ruling) may be requested in this respect. Furthermore, the ruling service has published a draft application on its website specifically regarding the granting of a temporary homework allowance in the context of the current Corona crisis. This application was to be dealt with as a matter of urgency, so that a decision would follow quickly.
In addition, the cost of using the internet connection for professional purposes can also be reimbursed, insofar as it is not already paid for by the employer. This reimbursement must not exceed 20 euro per month.
The downside is that employees who are often working in the field already receive compensation based on the same principles as those above. This so-called field work compensation of up to 17 euro per day is reduced when the employee is actually spending less time out in the field.
Last update: 30/04/2020