Transition scheme for WHT exemption for work shifts gives more legal certainty

At the Council of Ministers meeting on 20 March 2024, the government reached an agreement on adapting the WHT exemption for work shifts. This legal reform aims to defuse the bomb that the Constitutional Court had placed under this tax-exemption scheme and to provide more legal certainty to taxpayers.

What’s it about?

Companies that operate using work shifts can benefit from a corporate withholding tax (“WHT”) exemption of up to 22.80% of the workers’ wages (cf. Art. 275/5 Income Tax Code 1992 – WHT Exemption).

But this exemption scheme must meet several conditions, including that consecutive shifts must perform “the same work in terms of job description and scope.”  In practice, there are a lot of controversy about how this condition should be interpreted. Is “comparable” work considered “the same”? And should this condition be assessed at shift-level or according to each individual worker? And wouldn’t a strict interpretation give rise to an illegitimate distinction in terms of treatment?

In its judgment of 8 February 2024, the Constitutional Court answered by all means in the negative. This judgment was unexpected for those who must apply the rules in practice. It therefore became a threat, as if it were a Sword of Damocles, to the application of the exemption for many companies.

Now, the ball is back in the court of the Court of Cassation. It will have to rule on the specific interpretation of “the same work in terms of scope.” A judgment on this from the Court of Cassation is still expected before the summer recess.

But the government does not want to wait until the bomb explodes; it’s taking this matter in its own hands.


What was decided?

The agreement entailed inserting the so-called “bis” variant (i.e., an “improved” work-shift variant). This would be additional to the existing rules, which remain unchanged.

The key aspects of the bis variant are the following:

  • Transition scheme: For the sake of clarity, this concerns a transition scheme that applies up to and including 31 December 2026, but it will have retroactive effect and will apply to all wages that have been paid out since 1 January 2021. The bis variant has been introduced in anticipation of a more thorough reform in the future.
  • Unequal work falls in scope too: the bis variant no longer requires that the same scope of work be carried out in consecutive shifts. Instead, this condition has been moved to become part of the specific calculation of the exemption. Companies that operate using irregular work shifts can therefore apply this variant.
  • Proportional application: the sum of the exemption is reduced proportionally to the difference between the consecutive work shifts during the relevant month. Let’s say that shift 1 systematically consists of 40 workers and shift 2 has 60 workers. In such scenario, the exemption will be reduced by 20%.

The merit of what has been reached in this agreement is that there will be no more debate about whether “the same work in terms of scope” is an all-or-nothing discussion, which is what’s happening now. This offers additional legal certainty for taxpayers, which is always welcome.

But this does not detract from the fact that the exemption scheme has become more complex again, and a careful follow-up is necessary to determine the correct sum of the exemption. It’s really about a scheme of choices, so companies will have to figure out which scheme they will apply.

Furthermore, legal uncertainties continue to exist, so not all points of debate have been resolved yet.



Do you have any questions about the application of the tax exemption, or is the tax authority inspecting your business? Contact Luk Cassimon ( or 0472/467.847) or your usual point of contact at Monard Law.

This article is written by

Looking for advice on a specific topic?

We will guide you to the right person or team.