Belgium: Night and shift labour incentive

Belgium’s withholding tax exemption for night and shift work has a substantial positive impact on Belgian labor cost, but has been subject to significant uncertainty in recent years. This as a result legal uncertainty and extensive tax audits.

Following case law from Belgium’s highest courts and a temporary legislative fix in the form of the “bis-variant,” a new legal framework will now apply. Based on the first versions of the new law, from 1 January 2027, only one calculation method will remain in the form of an updated and permanent bis-variant. Companies would no longer have a choice, but to start calculating the bis-variant. This although a large number of companies have not done this homework to date, resulting in a substantial risk in case of tax audit. The new rules would also introduce a statutory tolerance margin, further clarify the meaning of “shift,” and update the required shift premium.

In its judgement of 26 February 2026, the Belgian Constitutional Court interpreted the requirement that shifts perform the same work in both content and scope very strictly. Contrary to the administrative tolerance that had existed previously even a limited difference between shift sizes could lead to the loss of the exemption. In practice, this strict condition was difficult for many if not most companies to meet.

To address this, a temporary “bis-variant” was introduced by the Legislator. Under that approach, identical shift size was no longer an absolute condition for applying the exemption. Instead, a greater difference in size between shifts resulted in a lower exemption.

This arrangement was explicitly temporary and was available only until 31 December 2026, meaning new legislation was required before year-end.