A royal decree was published in Belgium’s official gazette on 14 April 2023, confirming the employer and employee social security exemption on compensation paid for the surrender of authors’ rights (Dutch | French). The National Social Security Office (NSSO) subsequently on 26 April 2023 published its interim instructions covering the new exemption (Dutch | French). This follows the reform of the tax regime applicable to authors’ rights income as from 1 January 2023 enacted by the program law (1) of 26 December 2022. The reform prescribes more strictly the scope of application of the regime and provides a one-year transitional period for taxpayers who used to benefit from the regime but are no longer eligible following the reform.
The royal decree provides for an evaluation of the new exemption after two years of implementation to determine the impact of the exemption on the social security budget, and any improper use of the exemption.
This alert summarises the key provisions of the exemption.
As of the first quarter of 2023, compensation for the surrender of authors’ rights will be excluded from the definition of “wages” for social security purposes provided that the following cumulative conditions are met (these are in line with the definition introduced as from 1 January 2023 within the new fiscal regime for authors’ rights):
In addition, the royal decree prohibits the conversion of existing remuneration to authors’ rights compensation, subject to the transitional provisions discussed below.
An exemption to the conversion prohibition is provided for authors’ rights compensation that was declared as movable income in 2022, if the amount of the compensation is limited to the lower of:
In this case, the employer will need to declare the amount to be converted to the NSSO by 31 December 2023. If nothing was reported in 2022, the amount for 2021, 2020, 2019, or 2018 can be declared.
An additional transitional measure is provided for authors’ rights compensation that was correctly reported to the tax authorities but not for social security purposes. In this case, a social security regularisation can be requested for the years 2018, 2019, 2020, 2021, or 2022. The request should include all amounts of compensation for authors’ rights that were not reported to the NSSO and needs to be submitted to the NSSO before 30 June 2023. The regularisation will not lead to retroactive payment of social security contributions, interest, or fines, but employers need to act promptly.
Stefanie is part of the Deloitte Legal's Employment, Pensions & Benefits practice. She is an employment law and social security specialist, known for her outside the box thinking, innovative and pragmatic solutions for all her clients’ personnel related legal matters. Stefanie is a well know expert for social inspections in Belgium and advises the Belgian government on topics of social criminal law. She wrote a handbook on the topic which is used in the master after master social law. In addition, she advises clients on employment and social security law related aspects of compensation packages, structuring self-employment relations (consultancy and management agreements), the S within ESG and social inspections. Next to that Stefanie was a lecturer at Ghent University College for 7 years.
Sofie is specialised in the broad scope of reward, including reward strategy, tax & legal analysis and compliance. She leads Deloitte's reward team, assisting both international as Belgian clients, both public as private clients. This includes reward strategy, equity and incentives, pension and benefits, flexible benefits, executive reward, M&A related reward topics, in-depth tax advisory, and more. Next to that, Sofie is the Tax & Legal sustainability lead, closely connecting with the sustainability consulting team, strongly committed to help clients on their sustainability journey, including advice on legal obligations, policy drafting linked to the different sustainability platforms, assisting clients to obtain funds and incentives, apply tax efficient measures and advise on ESG KPIs linked to executives' bonus plans.