Family Tax Credit (CIF)
Verified 01 January 2024 - Directorate for Legal and Administrative Information (Prime Minister)
The purpose of the Family Tax Credit (FTC) is to encourage companies to incur expenses that enable their employees to reconcile their family and professional life. It allows companies to deduct part of their expenses from their taxes. The CIF rate varies according to the categories of expenditure incurred. The amount of the tax credit is capped at €500,000/year.
Any company who has employees may benefit from the tax credit if it is subject to a actual taxation system (normal real speed or simplified real speed) The company may be subject to income tax (IR) or to business tax (IS).
A company who does not have an employee or who is subject to the micro-company system cannot therefore benefit from the family tax credit.
The Family Tax Credit (FTC) covers the following expenses:
- Expenditure for the establishment and operation of a facility for children under the age of 6. This establishment must be operated directly by the company and it must accommodate the children of its employees under the age of 3 years
- Payments made directly by the company for the care of the children of its employees under the age of 3 years, private or public bodies
FYI
The childcare facility for children under the age of 6, funded in whole or in part by the company, can also accommodate children whose parents are not employed.
The rate of the tax credit varies according to type of expenditure carried out by the company.
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Expenditure on childcare in an establishment
This concerns the following expenditure:
- Expenditure on the establishment and operation of establishments for children under 6 years of age (crèche, drop-in center)
- Payments made for the care of children to institutions run by bodies outside the company (crèche, drop-in center)
The tax credit is 50% the amount of such expenditure.
Expenses to fund personal services
The tax credit is 25%the amount of expenditure.
Expenditure relating directly to employees
The expenditure concerned is as follows:
- Training expenses committed to employees of the company benefiting from educational parental leave or a reduction in their working hours. Working hours shall not be less than 16 hours per week.
- Training expenses committed by the company for new employees recruited after the resignation or dismissal during parental education leave. This training must begin within 3 months of hiring and within 6 months of the end of this leave.
- Remuneration paid by the company to its employees on leave, paternity, maternity leave, parental leave or sick child leave
- Expenditure to compensate company employees who have had to incur exceptional childcare costs because of an unforeseeable professional obligation. This professional obligation must have taken place outside the normal working hours.
The tax credit is 10% the amount of such expenditure.
The calculation of the family tax credit is made by calendar year.
Its amount shall not exceed €500,000 per year.
Public aid (grants) received by the company as a result of the expenditure covered by the family tax credit is deducted from the basis for calculating the tax credit. Aid deducted from the amount of the tax credit is aid paid in the year for which the tax credit is calculated.
Example :
A company spends €50,000 for the care of the children of its employees in a specialized establishment, and €275,000 to fund personal services.
The amount of the credit that she will receive is equal to €50,000 x 50% + €275,000 x 25% = €93,750.
If his tax is equal to 250,000 in 2023, with the benefit of the tax credit, this amount will be equal to €250,000 - €93,750 = €156,250
The rules vary depending on the company's tax regime.
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Company subject to income tax (IR)
The company subject to income tax (IR) must send the calculation aid form No. 2069-FA-SD with its supplementary income statement No 2042 C pro.
Company subject to business tax (IS)
The company subject to business tax (IS) must attach the tax form 2069-FA to his statement of balance of IS No. 2572-SD.
The tax credit reduces the amount of tax payable. It is then reduced by the amount of the tax credit.
When the amount of the tax credit to which the company is entitled exceeds the amount of its tax, the tax authority refunds the surplus to the company.
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Company subject to income tax (IR)
The company must defer the amount of the tax credit it is claiming on its income tax return 2042-C-PRO.
Company subject to business tax (IS)
The company must apply for a refund on its business space under "my services" using the following document:
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