For employees not having been granted the “expat status”, but normally frequently travelling for business purposes, COVID19 could cause unpleasant tax surprises. Indeed, in general, on the basis of Article 15 (OECD model) of the applicable double taxation treaty, an employee is taxable in his home State, except where he can prove his physical presence abroad for the performance of his professional activities. The salary corresponding to those working days exercised abroad are then normally exempted in the state of residence and taxable abroad (the working State). If, because of the COVID19 crisis, the employee is unable to perform abroad and this, contrary to his normal working rhythm, this would normally have a serious impact on his tax situation. In principle, this means that this employee would suddenly (at least for the COVID19 crisis period) only perform in his home state and would thus be taxable in his home state on a bigger part of his salary.
In this context, Belgium concluded amicable agreements with Germany, The Netherlands, France and Luxembourg to counter such unexpected effects. The solution is that for those who cannot work in the usual working state because of the COVID19 measures and are stuck at home, these working days from home will be ignored in terms of the analysis of the allocation of the taxing authority on the basis of the applicable double taxation treaty. In other words, the “home” working days are -by fiction- considered to have been performed where work would normally have been performed under a normal work regime.
For employees who fall under the scope of Article 15 of these double tax treaties a solution has thus been agreed upon.
Some expats benefiting from the special tax regime believed such rule would also be applied to their situation. This not true and therefore this may mean “bad news”.
As you know, for expats benefiting from the special tax regime, the taxable basis is calculated using the so-called “travel exclusion”. The days performed outside Belgium are not allocated to Belgium and the corresponding wage is not taxable in Belgium.
COVID19 home working days are not deemed fiscally neutral compared to their normal working and travel patterns.
The tax administration has indicated that the general rules remain in place for expats and therefore there is no “COVID19 tolerance” for working from home for them.
For the calculation of the Belgian taxable basis, they will only consider the working days actually performed abroad.
For the expat who travelled less and was “stuck” in Belgium, this will mean an increase of the Belgian tax debt. For those who were “stuck” abroad and performed more working days abroad, the Belgian tax debt will fall. For the latter group, attention should be paid to a possible increase in foreign tax burden in case they have remained tax resident in their home country.
For one group clearly undesirable effects, for the other a more pleasant prospect in difficult times. For companies that have expats in the first category, I recommend that you have a conversation about this in time, check the contractual agreements (gross/net guarantee) and adjust where needed the salary withholding tax in due time.
“What makes you feel at home?” Iliv, the Belgian information platform on daily life at home, asked over 2000 respondents last year. Exactly half of these respondents feel it is imperative that the people they love live there too. And over thirty percent listed ‘my things’, ‘decoration’ and ‘crockery’. Almost a third felt a pet was an essential part of home life and over a quarter feels a garden or terrace and own furniture are important, just as connections with friends, family and furniture play a role in how at home we feel. In short: it’s both our favourite people and our favourite things that turn a house into a home.
“It is both our favourite people and our favourite things that turn a house into a home.”
That we like having our favourite people around seems obvious. But that doesn’t mean it’s always easy living together. Creating a warm and stable home for your family is essential according to the Flemish child- and youth psychiatrist Peter Adriaenssens. Last year he wrote a book entitled ‘Nesten’ in which he attempts to answer the question of what makes a family home. “It’s a work in progress,” he feels. “A house becomes a home when each family member feels free to be themselves, and where there is noticeable effort to form a unit. A nest really. And seeing as you can’t just buy one, nor create one from one day to the next, nesting equals some serious work,” he writes in his introduction.
Adriaenssens pleads for slow and steady creation, a critical view and including the children in the process of furnishing the home. “A house takes care of our physical needs, as it provides warmth, quiet and a safe haven. But nesting is only possible when you are free to turn your house into your own.” Inspiration, he says, can be found anywhere: in your own past and the house you grew up in, through talking to family members, from other families, or from magazines and books, but putting your own stamp on it is essential.
“Interior magazines shouldn’t dictate how you create your home. That the lamp by designer X works so well with the table of Y is a possibility, one of a thousand. But we wouldn’t wish a life in an interior upon any family with young children. We shouldn’t begrudge them life in a living, breathing environment; we should allow them to experience a real home.”
That we should want to keep our favourite things close by, as shown by the Iliv survey, makes sense according to Ruth Mugge. Ruth is an associate professor at the Industrial Design Faculty of the Technical University Delft and researches product attachment; the strength of the bond that we feel with a product. “An object that we feel an affinity to conjures up emotions. People can feel happy, proud or warm towards their favourite things. Or sad in regard to an heirloom. An object to which you are attached has a special meaning that brings about feelings of protection.”
“People can feel happy, proud or warm towards favourite objects.”
“These are also the things we take along when we move house.” Her research shows there are four main reasons for attaching to an object: because they give expression to your own identity, because they bind you to a group, because you enjoy them or because they remind you of something or someone. “Of these reasons, memories are the strongest binding factor, as they make an object irreplaceable. Logically this is the most important reason to keep them with you or to display them in your home.”
“Moving often means a change of identity, whether it’s becoming a resident of a new town or a new country. If you want to keep your old identity intact, then it’s important to give the objects that show your identity an important place in your home. But if you’re looking forward to a ‘new you’ then they will be less important,” And, Ruth Mugge admits: “Extreme expats, people who move regularly for professional reasons, have one of two strategies: either they are less likely to bond with objects than others would as they know it is only temporary. Or they will take a little bit of ‘home’ with them with each move.” A kind of survival kit that can easily be integrated into a property, essentially.
This product attachment may partially explain why we are seeing so many display cabinets in furniture catalogues these last few years, both in high-end and high-street design. The still life’s you can create here are literally that; they bring instant life to a home. Only recently British interior magazine Elle Decoration devoted no less than six pages to ‘the art of display’; smart ideas for modern-day still life’s in trendy colours.
“An absolute must for any home is a great sofa; somewhere you can retreat to and relax.”
“An absolute must for any home is a great sofa; somewhere you can retreat to and relax,” says Katja van Putten, project manager at Iliv. “It’s surprising how many people find this indispensable to feeling at home somewhere,” she stresses. And then of course there are the tricks of the trade that will make any house feel warm and welcoming.
In her book ‘Home is where the heart is’ interior design specialist Ilse Crawford highlights the most important ones. “There are certain basic things that make us feel safe – and have for centuries. They are irrational and independent of style: drawers and doors that close with a sturdy clunk (why else would car manufacturers add the noise digitally?); high back furniture; overscale tables, beds and lamps; things that resonate of home, and help us create a new and deeper sense of domestic comfort.”
She feels it makes sense that we should like vintage furniture, as it reminds us of childhoods spent at parents’ and grandparents’ homes, and she knows that our bodies much prefer rounded shapes. That we should love rocking chairs, sheepskin rugs, traditional textiles and cosy corners to sit in is logical, as is a warm environment with mood lighting and healthy, clean air. It’s hardly surprising to her that comfort and decoration have become important again in the world of interior design. “Patterns, wallpapers and artisanal items bring more intimacy, privacy, sensuality and beauty and offer a counterbalance to the more clinical designs. “Home,” she writes, “ is a mental state as well as a place.”
Five easy suggestions that will ensure you feel at home instantly:
• ensure you have somewhere to retreat to;
• make sure your house is warm, literally, but also through the use of warm colours, materials
and mood lighting;
• involve all housemates in the decorating and be flexible;
• put together a survival kit of your most precious items when moving house;
• have a display cabinet with favourite photographs, memories and meaningful objects.