As from 1 January 2018, new lump sum amounts will apply for the valuation of the benefits in kind resulting from the private use of electronic devices and services provided free of charge (PC, tablet, mobile phone, internet connection and mobile subscription). A Royal Decree of 2 November 2017 regulates this for tax treatment purposes. The treatment by the National Social Security Office (NSSO) will be aligned with the tax treatment.
Situation prior to 1 January 2018
The current scheme for personal income tax purposes, which remains applicable until 31 December 2017, provides for a lump sum valuation of the benefits in kind resulting from the private use, free of charge, of a PC, internet connection and internet subscription. The benefit in kind for a PC amounts to EUR 180 per year and for an internet connection and internet subscription EUR 60 per year. These percentages have been in place for years and no longer take into account the reality of the situation. For example, PCs have become cheaper over the years, while the existing flat rates have not changed.
For tablets and mobile phones, a lump sum valuation is not provided. The benefit in kind equals the value of the tablet or mobile phone to its beneficiary, which is not always easy to determine and can be a matter for discussion.
For social security purposes, there is no legal basis for determining the benefit in kind. However, the NSSO provides for a valuation method in its administrative instructions: valuation on a lump sum basis or based on the actual value of the benefit in kind (see the comparative table below).
Situation as from 1 January 2018
The Royal Decree of 2 November 2017 updates the valuation of benefits in kind resulting from the private use of electronic devices and services provided free of charge and eliminates the existing discrepancies. On the one hand, "new" electronic devices, such as tablets or mobile phones, are now also covered. On the other hand, the applicable lump sum amounts have been revised in order to better match the reduction in the actual cost of these electronic items.
The Minister of Finance has also announced that the NSSO will apply the same lump sum amounts from 1 January 2018 onwards.
New lump sum amounts
| Lump sum valuation on an annual basis | Until 31 December 2017 | From 1 January 2018 onwards | |
| Personal income tax | Social security | Personal income tax and social security | |
| PC and/or laptop | EUR 180 | EUR 180 | EUR 72 (per device) |
| Tablet | Actual value | Actual value | EUR 36 (per device) |
| Mobile phone and smartphone | Actual value | EUR 150 | EUR 36 (per device) |
| Internet subscription | EUR 60 | EUR 60 | EUR 60 (per device) |
| Mobile phone subscription | Actual value | Included in the lump sum of EUR 150 for mobile phone or smartphone | EUR 48 |
Note that these valuations may have to be combined. For example, for a smartphone provided free of charge with internet and telephone subscription, the benefit in kind will be EUR 144.
Employers will have to take these new lump sum amounts into account in their payroll administration from 1 January 2018 onwards.