Retroactive changes to daily allowances for foreign assignments from January 1, 2025

In its circular Circular 2025/C/70 of October 27, 2025, published by the Federal Public Service (FPS) Finance, the Belgian tax authority clarified significant changes regarding the flat-rate daily allowances granted for professional missions abroad. These changes are retroactive, taking effect from January 1, 2025.

What is the application regime?

A company can pay an employee or manager a non-taxable flat-rate daily allowance to cover expenses incurred abroad (meals, snacks, local transportation, communications, minor expenses). This allowance does not cover accommodation or round-trip travel expenses. These must be reimbursed based on receipts.

What changes as of January 1, 2025?

Before this date, several conditions limited the granting of the allowance:

• A minimum absence of 10 hours was required for a day to be considered as a mission abroad;
• The departure and return days were eligible for only half of the full allowance;

With the new circular:

• The 10-hour minimum is removed. Any mission can now qualify for the allowance, regardless of its duration;
• The allowance is no longer reduced by 50% on departure and return days. However, if the employer covers accommodation and includes certain meals (lunch, dinner) or minor expenses, the allowance must be reduced as follows:
  • 35% for lunch;
  • 45% for dinner;
  • 20% for minor expenses.

Why the retroactivity and what are the effects?

The goal is to simplify the conditions for granting allowances and strengthen legal certainty for the companies and workers involved. By removing the 10-hour condition and the 50% reduction, the administration facilitates the application of this regime. However, the percentage reduction remains a principle of good practice when other expenses are already covered.

Practical effect: Employers will need to review their policies on foreign assignments, recalculate the allowances granted since January 1, 2025, and ensure that the new rules are applied in case of inspection.

Points of attention for the employer

• Check that each daily allowance complied with the maximum amounts per country;
• For departure and return days: correct the previous 50% reduction but apply the percentage reductions where applicable;
• If accommodation is reimbursed or provided and includes meals/expenses, anticipate the necessary adjustments;
• Keep documentation and supporting evidence for a tax audit, to demonstrate that the allowance was for “employer-specific expenses.”