Working on Belgian construction sites: when can you remit less payroll withholding tax?

Where a foreign company is involved in construction, installation, maintenance, repair, or cleaning activities at sites located in Belgium, it may qualify for a partial exemption from remitting payroll withholding tax. Under this exemption, part of the payroll withholding tax withheld is not required to be remitted to the Belgian tax authorities, potentially resulting in a significant financial benefit.

However, this tax regime is subject to strict conditions, and the evidentiary requirements have become increasingly stringent in recent years. Its correct application therefore requires careful monitoring and comprehensive supporting documentation. Below, we summarise the applicable conditions, the method for calculating the benefit, and the documentation required to support the claim.

Conditions of application

In order to be eligible for the partial exemption from remitting payroll withholding tax for works on immovable property, foreign companies must cumulatively meet the following conditions:

1. The employees concerned are employed in a shift

For activities involving work on immovable property, the term “companies where shift work is carried out” refers to companies in which such activities are performed by one or more shifts, each consisting of at least two individuals who carry out identical or complementary tasks, in terms of both content and scope, at the relevant site.

A shift must consist of at least two individuals, but not necessarily two employees. A shift may also be formed, for example, by a self-employed person/company director and an employee. However, the exemption may only be applied to employees (and not to self-employed persons). Students or apprentices on work-study schemes are not taken into account when determining whether a shift exists.

2. The work in question entails works on immovable property

The exemption only applies to works that qualify as “works on immovable property” in accordance with the VAT regulations.

Therefore, it is essential that the nature of the works carried out can be correctly demonstrated. A general reference to the company’s activities or to the job titles of employees is insufficient to meet the requirements.

3. The employees involved are employed on site

Works on immovable property carried out by a team on site at the employer’s customer’s premises are regarded as on-site work.

In contrast, work performed by a team at the employer’s head office, branch office, workshop, or warehouse is not considered to constitute on-site work.

4. The gross hourly wage of the employees concerned is at least EUR 17.64 (calendar year 2026).

To be eligible for the exemption, the employee’s gross hourly wage must amount to at least EUR 17.64 in the year 2026. This threshold is indexed annually on 1 January. For the calculation of the exemption, the relevant salary is the gross hourly wage before deduction of the employee’s personal social security contributions, as stipulated in the employment contract.

5. Site notification 30bis

As of 1 April 2022, employers may only benefit from this advantage where the mandatory “30bis” site notification for works on immovable property has been duly submitted.

Where no site notification is required, the existing rules remain unchanged and the employer may continue to apply the reduction, provided that all other conditions are satisfied.

6. The 1/3 rule

Companies may only apply the exemption to employees who, during the relevant month, have spent at least one third of their total working time (expressed in hours) carrying out works on immovable property on site and in shifts.

To assess whether the one-third requirement is satisfied, the following fraction is applied based on the number of hours worked:

• The numerator includes the number of hours actually worked in shifts, as well as the hours during which the employment contract was suspended while wages continued to be paid by the employer, provided it can be demonstrated that the employee would normally have performed shift work on site in accordance with their work schedule.
• The denominator includes the total number of hours actually worked, together with the total number of hours during which the employment contract was suspended while wages continued to be paid..

If the threshold is not met, the exemption for that employee cannot be applied in the given month.

Which activities are eligible?

T he exemption may only be applied in respect of employees performing the following activities:

1. The building, renovation, finishing, furnishing, repair, maintenance, cleaning and demolition, in whole or in part, of immovable property by nature.

In addition, the act of supplying movable property and attaching it to immovable property in such a way that it becomes immovable by nature.

Immovable property refers to land and any buildings situated on it, which by their nature cannot be moved;

2. Other transactions that are treated as works on immovable property:

a. any transaction involving both the supply and the incorporation into a building:

• of components or part of components of central heating or air-conditioning, including burners, tanks and regulators and control devices attached to boilers or radiators;
• of components or part of components of a sanitary installation of a building and, more generally, of all fixed sanitary or hygienic appliances connected to a water supply or sewer;
• of components or part of components of an electrical installation of a building, with the exception of lighting appliances and lamps;
• of components or part of components of an electrical bell system, of fire alarm devices, of theft alarm devices and of a home telephone;
• of storage cupboards, sinks, sink cabinets and furniture with built-in sink, washbasins and furniture with built-in washbasins, extractor hoods, fans and air fresheners with which a kitchen or bathroom is equipped;
• shutters, roller shutters and roller blinds that are placed on the outside of the building;

b. any operation which has as its object both the supply of wall coverings and their installation in a building, whether that covering is attached to the building or simply cut to size on site according to the dimensions of the area to be covered;

c. any work consisting of attaching, installing, repairing, maintaining and cleaning goods referred to in a. or b. above.

Exemption amount

Companies meeting the above conditions are exempt from remitting 18% of the taxable remuneration of the employees concerned as payroll withholding tax. Bonuses (other than the shift premium, including the end-of-year bonus), holiday pay, and salary arrears are excluded from the calculation basis.

The calculation is not performed on an individual employee basis, but on the aggregate taxable remuneration of all eligible employees. Any excess exemption relating to one employee may be transferred to one or more other employees in order to offset the withholding tax due.

The amount of the exemption is, however, limited to the amount of withholding tax actually withheld from the taxable remuneration to which the exemption applies.

Burden of proof and documentation

In order to apply the exemption, the employer must be able to demonstrate that all of the above conditions have been satisfied. In particular, it must be clearly established that the employees effectively carried out works on immovable property, that such works were performed in shifts, that the employees carried out the same or complementary activities, and that the works were performed at the relevant location and during the relevant period.

Since April 2022, the burden of proof has been significantly strengthened, with the tax authorities requiring specific and verifiable supporting evidence. In practice, this means that contracts, specifications, work orders, site reports, task allocations, and other relevant documentation must be carefully retained. The full burden of proof rests with the employer.

Furthermore, the employer must keep a nominative list available to the administration, containing the full identity of each employee and the period of the year in which they have performed shift work. The administration may at any time check the accuracy of this data and request and examine the necessary supporting documents.

For each site where shift work relating to immovable property is carried out, it must be possible to demonstrate either that the 30bis notification has been duly submitted or that no such notification is required.

With regard to the withholding tax return, the employer benefiting from the exemption is required to submit both a general declaration (form 274.10) and a specific declaration using code 57.

Capping the exemption

As of 1 January 2027, a correction factor will be applied. As a result, the amount of the exemption will be lower, meaning that a higher amount of withholding tax will have to be remitted.

The correction factor is:

• 97% for remuneration paid or granted between 1 January 2027 and 31 December 2027;
• 93.35% for remuneration paid or granted between 1 January 2028 and 31 December 2028;
• 95.9% for remuneration paid and granted as from 1 January 2029.

At present, it remains unclear whether the percentage will be maintained or revised after 2029.

The general method for calculating the exemption nevertheless remains unchanged.

Conclusion

The partial exemption from remitting payroll withholding tax can represent a significant financial advantage, but its application requires a careful, well-substantiated, and properly documented approach in order to avoid discussions with the tax authorities.

Would you like to assess whether your current documentation is sufficient, or explore what the partial exemption from remitting payroll withholding tax for works on immovable property could mean for your company? Our specialists are available to assist you further.