Tax consequences for self-employed persons
of deferring the payment of social security contributions
The previous government had decided to grant self-employed workers a deferment of payment of their social security contributions. But what is the impact of this deferral on the tax deductibility of these contributions?
Deferral of payment
Shortly after the first lockdown (and thus the loss of revenue), the government decided to postpone many tax and social security payments. You were able to postpone the payment (and declaration) of VAT by one month. The advance payments for the third and fourth quarters entitle you to a higher bonus as compensation for a smaller advance payment for the second quarter.
In the area of social security, you have been able to defer payment, on request, of social security contributions for 2020 and regularisation contributions for the quarters of 2018 which fall due on 31 March 2020, 30 June 2020, 30 September 2020 and 31 December 2020. The government has granted a one-year deferral for these deadlines.
Schematically
Contribution for the first quarter of 2020: normally before 31 March 2020, now before 31 March 2021.
Second quarter 2020 contribution: normally before 30 June 2020, now before 30 June 2021.
Third quarter 2020 contribution: normally before 30 September 2020, now before 30 September 2021.
Fourth quarter 2020 contribution: normally before 31 December 2020, now before 15 December 2021 (!).
- 2018 regularisation contributions that were due on 31 March 2020 will have to be paid before 31 March 2021.
- 2018 regularisation contributions that were due on 30 June 2020 must be paid before 30 June 2021.
- 2018 regularisation fees that were due on 30 September 2020 must be paid before 30 September 2021.
- The 2018 regularisation contributions that fall due on 31 December 2020 must be paid before 15 December 2021.
Consequences for PLCI
The contributions you pay as a self-employed person for a supplementary free pension for the self-employed (PLCI) are deductible as professional expenses, provided you have paid your social security contributions on time. So if you do get a deferral, the question arises whether you also qualify for the deduction of these PLCI contributions.
In October, the tax authorities declared that, as a one-off administrative tolerance, they will not reject the tax deductibility of PLCI contributions paid in 2020 for the sole reason that the taxpayer has made use of the deferral of payment of his social security contributions under COVID-19.
In other words, you can tax-deduct PLCI contributions paid in 2020 in two cases: either you have paid the social security contributions due in 2020 in the normal way or you have obtained a deferment of payment for these contributions. If you have not paid your contributions but have not obtained a deferment, PLCI contributions will not be deductible.
In 2021, you will be able to deduct PLCI contributions, provided that you have again paid the social security contributions for 2021, but also those for 2020. Let's imagine that you are unable to pay the contributions in 2021. In this case, only the PLCI contributions of 2021 will not be deductible. The deduction of the 2020 contributions will still be deductible.
Consequences for the tax credit
The tax credit for the self-employed (article 289bis of the CIR92) is a tax credit granted for increasing equity capital. To benefit from the tax credit, you must attach to your tax return a certificate confirming that you have paid your social security contributions as a self-employed person.
Here too, it is questionable whether you can produce this certificate if you have not paid your contributions because you have benefited from a deferral. In this case, the administration confirms an administrative tolerance: you will be able to benefit from the tax advantage of the tax credit for the income year 2020 if you have not paid your contributions as a result of obtaining a deferment.
You will have to pay social security contributions in 2021, not only in 2021 but also in 2020. Otherwise, you will not be entitled to a tax credit for 2021. However, the tax credit for 2020 will still be available.
