INTERNATIONAL ASSIGNEES WORKING IN BELGIUM - CREATING VALUE FOR YOUR BUSINESS THROUGH PEOPLE COUNTRY - BELGIUM - PWC
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
www.pwc.com/globalmobility
International assignees
Working in Belgium
Creating value for your business
through people
Country – Belgium
Human
Resources Services
International
Assignment
Taxation Folio
Last Updated: April 2018 This document was not intended or written to be used, and it cannot be used, for the purpose Menu of avoiding tax penalties that may be imposed on the taxpayer.
Country:
Belgium
Introduction: International assignees working in Belgium 4
Step 1: Understanding basic principles 5
Step 2: Understanding the Belgian tax system 8
Step 3: What to do before you arrive in Belgium 21
Step 4: What to do when you arrive in Belgium 24
Step 5: What to do at the end of the year 25
Step 6: What to do when you leave Belgium 26
Step 7: Other matters requiring consideration 27
Appendix A: Overview of income tax rates 29
Appendix B: Overview of personal allowances 30
Appendix C: Typical tax computation 32
Appendix D: Tax-free allowances on a gross 34
remuneration package
Appendix E: Belgium contacts and offices 36
Additional Country Folios can be located at the following website:
Global Mobility Country Guides
International Assignment Taxation Folio 3
Introduction:
International assignees
working in Belgium
International assignees taking up detailed advice should be sought This Reform provides
employment in Belgium are frequently before any specific decisions are made. increased fiscal autonomy to
uninformed about the Belgian tax and Further information can be obtained the Regions (Flanders,
social security system to which, in from our offices as listed in Brussels and Wallonia),
most cases, they will become subject. Appendix E. implying significant changes
with respect to the calculation
This memorandum is designed to The 6th Reform of the State has method of personal income
assist both international assignees and introduced major modifications in the taxes in Belgium since income
their employers in identifying the tax Belgian tax system impacting both year 2014.
and social security implications of residents and non-residents taxpayers
assignments to Belgium. It is not since income year 2014.
intended to be complete. More
4 Human Resources Services
Step 1:
Understanding basic principles
The scope of taxation in of publicly traded outlined in
Belgium Belgian or foreign paragraphs 27 to 32
securities. are fiscally
1. An international considered 'non-
assignee taking up Additionally, a new residents' and benefit
employment in “wealth tax” of 0,15% from special tax
Belgium will has been introduced treatment. As non-
generally become as from income year residents, they are
liable to income tax 2018 on securities liable to pay Belgian
under Belgian law. accounts with an tax only on income
Other taxes that may combined and related to work
be relevant are average value of EUR carried out by them
property tax, and gift 500.000. in Belgium.
and succession duty.
Capital gains taxes 2. Residents of Belgium Residence and domicile
for private are subject to
individuals are levied personal income tax 4. Residence is the
only on sales to on their total relevant factor in
foreign companies worldwide income determining income
(outside the EEA) of from all sources tax liability. Under
substantial holdings where non-residents Belgian law, an
in Belgian companies are only taxable in individual is
and on sales of Belgium on their considered as a
property in certain Belgian source Belgian tax resident
circumstances. income (see if he has established
paragraphs 4 to 7 his domicile in
Since 2017, Belgian below for the Belgium, and – if his
resident taxpayers residence criteria). domicile is not
must also pay a tax located in Belgium –
on stock exchange 3. Certain expatriates if his seat of fortune
transactions for any who satisfy certain is located in Belgium.
disposal or purchase conditions as
International Assignment Taxation Folio 5
The domicile is the population record of applicable to certain
determined by facts and a Belgian municipality foreign executives
circumstances and is are deemed to be (see below).
generally defined as the Belgian tax residents
place where an (refutable presumption). 6. Generally, an
individual effectively international assignee is
and enduringly resides, 5. Domicile in civil law is considered to be a
where his family lives essentially the same as Belgian resident if:
and where his personal residence in income tax
law and is the term used – as a married person (or
contacts are maintained. legally cohabitant),
The seat of fortune on when considering
liability to inheritance his/her family
the other hand can be accompanies him/her
defined as the place tax. An international
assignee domiciled in to Belgium (irrefutable
where an individual presumption); or
manages his estate or Belgium can become
where the centre of his liable to Belgian – as a single person,
business activities are inheritance tax on he/she establishes
located. The tax worldwide assets even his/her permanent
residence of married when he/she is deemed
home in Belgium.
taxpayers is located at to be non-resident in
the place of the de facto Belgium for income tax
family residence. purposes due to the
Individuals registered in application of the
special tax regime
International Assignment Taxation Folio 6
A taxpayer may be in principle, no tax on A special tax regime is
considered to be tax- any investment income available to certain
resident in more than except interest and foreign executives and
one country based on dividends paid by a specialists working
each internal country Belgian company, temporarily in
residency rule. Where which are generally Belgium. Under this
this happens, a tax taxed at a flat rate of regime, executives are
treaty between the 30% (or in some considered as non-
countries in question particular cases 15% if residents for Belgian
may provide a solution conditions are met). tax purposes (see
to avoiding double With respect to below paragraphs 27 to
taxation. Most tax interest, exemptions 32).
treaties consider the from withholding tax
following elements to be may apply to non-
relevant in determining resident taxpayers
the place of residence: under local Belgian
rules. In this respect,
– the permanent home; the EU Savings
– the centre of economic Directive introduced a
mandatory exchange of
activity;
information regarding
– nationality. interest paid to foreign
EU nationals. This
Belgian non-residents exchange of
information system is
7. Belgian non-residents
applicable in Belgium
are taxed in Belgium on
since 1 January 2010.
their Belgian source
No (withholding) taxes
income only, i.e.
are due on the first
– Belgian-source EUR 960 of interest on
income from savings accounts
employment: in (figure for income year
principle, only 2018). The amount
employment income exceeding this
borne in Belgium or threshold is taxed at a
relating to Belgian rate of 15%.
work days (>183 days)
is taxable.
– Belgian-source
property income:
taxation on property
income located in
Belgium only;
– Belgian-source
investment income:
International Assignment Taxation Folio 7
The tax year and yearly after the assessment to non-residents who do
tax filing obligation notice is sent out. not earn at least 75% of
their worldwide
8. The Belgian tax year 10. The legal due date for professional income in
runs from 1 January to the filing of the resident Belgium during the
31 December. Where an tax returns is, in calendar year (except for
individual is resident in principle, end of June residents of France,
Belgium for only part of (paper version), and Luxembourg and the
a calendar year, his/her mid-July if filed Netherlands, who can
income in that period is electronically via “Tax- benefit from a prorata of
treated as if it related to on-Web”. The filing this notional transfer).
a full calendar year. deadline of the non-
However, since resident tax returns is 13. Although couples are
assessment year 2018, not fixed but usually taxed separately, tax
the personal tax falls during the third returns and assessments
deductions/reductions quarter of the tax year. are issued in joint
are reduced prorata names.
temporis based on Husband and wife
his/her period of 11. Tax on husbands’ and
residency in Belgium wives’ incomes is
during the concerned
calculated separately.
calendar year. For non Legal cohabitants are
residents of Belgium, it considered as married
is anticipated that
from an income tax
similar legislation will
perspective.
enter into force soon.
12. Where only one partner
9. Income of year X must
receives earned income,
be reported in a tax a notional transfer to the
return (either on paper other partner of 30% of
or electronically) the the earnings is allowed
year X + 1 (e.g. income up to a ceiling of EUR
year 2018 – tax year 10.720 (income year
2019). An assessment 2018), so that each is
note is sent by the tax accorded a basic
authorities the year minimum deduction
following the tax year
and benefits from a
(year X + 2). Any lower tax bracket. In
balance of tax due must case one partner
be paid to the tax
receives professional
authorities within two income lower than EUR
months after the 10.720, this notional
assessment notice is
transfer is also
sent out. Excess applicable under the
payments of tax are same limits. This
reimbursed by the tax
notional transfer is
authorities two months however not applicable
8 Human Resources Services
Step 2:
Understanding the Belgian tax system
Tax treatment of Methods of calculating tax municipal taxes at rates
employment income 15. Personal income tax is that range between nil
Basic principles calculated by and 9% of the total
determining the tax base income tax payable.
14. Employment income is Non-residents have to
defined broadly and and assessing the tax
due on that base. pay a similar additional
includes all fringe tax at a fixed rate of 7%
benefits provided by an Taxation is charged on a
sliding scale to of the total income tax
employer. In addition to
successive portions of payable. A typical tax
salary, taxable computation is
employment income net taxable income. For
income year 2018, the presented in Appendix
includes bonuses,
Federal tax rates range C.
commissions, cost-of-
living allowances, between nil and 50%. 17. In determining the tax
foreign service base, compulsory social
16. The tax calculation
allowances, housing contains two major security contributions,
allowances, tax components, notably the whether paid in Belgium
equalisation or abroad, are fully tax-
federal personal income
reimbursements, private tax and the regional deductible. Additionally,
use of company car, etc. personal income tax. professional expenses
The award of equities can be deducted from
Since income year 2014,
(RSUs, free shares, stock the Belgian regions are the taxable basis either
options, etc.) in indeed entitled to retain on an actual basis by
connection with surcharges on “Reduced producing the relevant
employment in Belgium Federal personal income vouchers or on a lump-
is taxable. For stock taxation”, and also grant sum basis. The
options, a lump-sum tax reductions/tax maximum deductible
method has been laid credits. The tax liability lump sum amount for
down for valuing may therefore differ income year 2018 is
benefits arising in the (although slightly at this EUR 4.720 on a gross
framework of qualifying stage) depending on the taxable salary of EUR
stock option plans. Region in which the 15.733 (the maximum
Detailed advice on the amount for directors
residence of the
implementation of stock taxpayer is located on equals to
option plans should be the 1st of January of the EUR 2.490 for income
sought from our local year 2018).
respective tax year.
offices. Residents also pay
9 Human Resources Services18. Personal income tax is benefits in Belgium, 22. This new rule limits
calculated on that tax those non-residents severely the tax
base, after personal must also have deductions/
allowances are taken maintained tax reductions previously
into account. Further residency in another available to non-
details on the tax rates Member State of the residents working in
and personal tax European Economic Belgium.
exemptions (such as Area.
marital quotient, 23. Pursuant to the 6th
deduction for children at 21. As from income year State Reform, with the
charge, etc.) are 2017 tax exemptions exception of the
provided in Appendix A and reductions will be (federal) deduction for
and Appendix B. calculated on a pro-rata alimony payments, all
basis in the event of a (other) “deductible
19. In addition to these change in tax residency expenses” have been
standard personal status during the year. converted into (federal
deductions, some This pro-rata calculation or regional) tax
personal expenses give concerns both Belgian reductions. Since
right to additional tax resident tax payers and income year 2014, the
deductions/reductions non-resident tax payers federal tax deduction for
at Federal or at Regional (if entitled –cfr. 20). a taxpayer’s own
level. These expenses dwelling has become a
are for example gifts regional tax reduction at
made to recognized the highest applicable
institutions, child care tax rate (maximum
expenses for children 50%). Since income year
younger than 12 year 2015, the tax reduction
old, titres-services/ for the own dwelling has
dienstencheques, tax been fixed at 45% for
reduction for own mortgage loans
dwelling, etc. concluded as of 1
January 2015. Since
20. Since income year 2014, then the Regions can
expatriates living in apply changes to the tax
Belgium as well as other benefit for mortgage
non-residents are only loans. The Brussels
entitled to personal Region has decided to
deductions (at the keep the tax reduction at
federal income level) 45% until 31/12/2017,
provided that they earn while the Walloon and
at least 75% of their Flemish Region decided
worldwide professional to limit it to 40%.
income in Belgium.
Moreover, in order to be
entitled to Regional tax
10 Human Resources ServicesFor mortgage loans Withholding taxes
concluded as of 1 24. You will in due course
January 2016 the be required to file an
Walloon region has annual tax return, either
replaced the tax at a special regional tax
reduction for the own office for non-residents
dwelling by the “Cheque (as beneficiaries of the
Habitat” (a tax special tax regime) or at
reduction that can be the local tax office of the
transformed into a tax municipality of
credit and where the residence. Tax
amount is determined in withholdings will
function of the taxable normally be made by
income and family your employer at source
situation of the on a monthly basis.
taxpayer) and as of 1
January 2017, the
Brussels region
abolished the tax
reduction for the own
dwelling and replaced it
by a higher exemption of
registration duties.
Given that additional
rules apply specifically
to each Region, this
should be analysed on a
case by
case basis.
International Assignment Taxation Folio 1125. If, while working in income that can be of an international
Belgium, you are kept excluded for services group. Employment
on the payroll of a rendered abroad. can be in a control and
foreign employer and coordination office of a
the salary cost is not Special expatriate tax multinational group of
deducted from the regime companies.
Belgian-source profits of Principle:
a Belgian permanent – employment in
27. Under certain Belgium must be
establishment of your conditions, a foreign
foreign employer, there temporary in nature;
executive assigned
is in principle no temporarily to Belgium – the centre of the
requirement for your within an international expatriate’s economic
employer to deduct group of companies may and personal interests
withholding tax at qualify for a special must not be in
source each month. taxation regime. The Belgium;
However, the tax executive will be treated
authorities could as a non-resident for – the expatriate may not
consider that tax must Belgian tax purposes, have Belgian
be deducted at source liable to Belgian nationality.
each month even if the personal income tax on
foreign employer has no 29. Various factors set out
his/her Belgian-source
Belgian permanent in a practice note dated
income only.
establishment but the 8 August 1983 apply in
salary cost is cross- Conditions: determining whether or
charged to a Belgian- not the centre of an
28. Expatriates who may
incorporated company. expatriate's interests is
qualify for the special
abroad. These may be
26. If you benefit from the tax regime are
divided into two groups:
management personnel,
special taxation regime
as described below in research personnel and Those relating to the personal
paragraphs 27 to 32 and foreign personnel position of the expatriate, such as:
without managerial
if your employer is
responsibilities who are ownership of real estate,
required to withhold
so highly specialised personal property or
income tax at source on
that recruiting such securities abroad;
your remuneration, it
may, at its own risk, take workers in Belgium is
the existence of a life
into account for the very difficult, if not
assurance policy taken out
impossible. To qualify,
computation of the abroad;
withholding taxes, the certain criteria have to
excluded non-taxable be met: continued membership of a
expense allowances – group pension scheme or an
– employment must be
albeit only to the extent equivalent savings or pension
in a qualifying entity.
that they do not exceed plan abroad;
This includes scientific
the limits of EUR 11,250 research centres or renewal of credit cards issued
(or EUR 29,750 per laboratories or by banks in the country of
annum in certain businesses under origin;
limited cases) – and any foreign control or part
12 Human Resources ServicesThose relating to the expatriate's 31. An expatriate newly 33. A non-resident who
work activity: transferred to Belgium changes his/her job in
is presumed to be a Belgium to work for a
continued affiliation to a Belgian tax ‘resident' firm affiliated to a
foreign social security once he/she has different international
scheme; registered at the Belgian group will in principle
possibly, the existence of a municipality. An lose his/her non-
application file must be resident status.
short-term employment
submitted to and
contract; 34. However, under certain
approved by the tax
the expatriate’s presence in authorities in order to exceptional
benefit from the special circumstances it might
Belgium to set up or
tax regime (and still be possible to
reorganise a business;
therefore be considered continue to benefit from
the executive’s willingness as a non resident the expatriate tax status,
to transfer his/her base of taxpayer in Belgium). but this will be
operations in the service of This application request examined in depth by
the group to another country must contain supporting the tax authorities on a
if so requested; documents case-by-case basis.
demonstrating the fact Benefits:
continuing to act as an
that the conditions to
officer of a foreign company 35. Expatriates who benefit
benefit from the regime
are met. The application from the special taxation
the nature of his functions
file must be submitted regime are considered
(executive or specialist).
to the tax authorities non-residents for
30. The fact that an within 6 months from Belgian tax purposes
expatriate has the arrival of the and are therefore
purchased a house in expatriate in Belgium. taxable on their Belgian
Belgium does not, in source income only. The
itself, constitute proof 32. Although there is no special tax regime
that he/she has decided defined time limit in the recognises that
to reside permanently in benefit of the special tax payments made by an
Belgium. The expatriate regime, the Belgian tax employer to an
is not therefore authorities tend to expatriate fall into two
precluded from claiming conduct systematic distinct categories:
to be temporarily audits after 10 years to
verify that the – base salary and foreign
resident.
conditions to benefit service premium,
from this regime are still which are both taxable
met by the expatriate. in Belgium to the
extent that they relate
Qualifying expatriates to services performed
moving to another in Belgium; and
employer in Belgium
International Assignment Taxation Folio 13– expenses reimbursed generally less favourable or transferred to
by the employer, some for the expatriates. This Belgium, whether paid
of which are not calculation also requires as lump-sum allowances
taxable in the a good understanding of or as specific
expatriate’s hands and the terms 'base salary' reimbursements of
are tax-deductible by and 'tax equalisation', outgoings. The Belgian
the employer (i.e. so- and an appreciation of tax authorities tend to
called “tax free their limitations, accept as non-taxable
allowances”). including the fact that those costs that an
the amounts computed expatriate would not
36. The computation of tax- do not necessarily have incurred if he/she
free allowances differs correspond to reality. had continued to work
according to whether the in his/her home
employee receives a 39. Paragraphs 40 to 55 country.
salary and a separate, below cover the rules for
identifiable an expatriate receiving a 42. A distinction is drawn
reimbursement of salary and separate between recurring and
expenses, or he/she is reimbursements of non-recurring costs.
on a gross remuneration expenses. Paragraphs 56
package, inclusive of to 64 cover the rules for 43. Non-recurring costs and
expenses. an expatriate on a gross expenses that are non-
remuneration package. taxable include:
37. The first category
includes expatriates An expatriate receiving – costs and expenses
paid on a net salary salary and separate incurred in moving to
basis, such as those reimbursements of Belgium;
benefiting from tax expenses – the costs of preparing
equalisation (in receipt 40. As long as an employer accommodation for
of a base salary after can show that occupancy in Belgium;
deduction of expenditure is its
hypothetical home- responsibility, expense – costs and expenses
country tax), or those allowances and other incurred in moving out
benefiting from tax benefits that it awards of Belgium.
protection. In these an expatriate will not be
cases, an employer can 44. Recurring costs and
taxable in his/her
pay allowances expenses that are non-
hands, and will continue
computed on the basis taxable include:
to be tax-deductible in
of international the hands of the – the supplementary cost
comparative studies, up employer. of accommodation and
to the limits set out in
additional cost of living
paragraph 54, below. 41. An expatriate will not be
compared with costs in
taxed on allowances
38. The method of the home country;
paid by the employer to
calculating tax-free cover additional – school fees (primary
allowances on a gross expenses that are and secondary
remuneration package is incurred as a result of education only) of an
fixed by the Belgian tax his/her being recruited international school;
authorities. The result is
14 Human Resources Services– one annual travel costs Housing allowance 48. If the cost of
for an expatriate and 46. This allowance is accommodation in
his/her family to their intended to reflect the Belgium is higher than
home country (air higher cost of the cost of comparable
travel, economy class); accommodation in accommodation in the
Belgium compared to home country, the
– loss incurred by excess may be properly
the costs that the
his/her inability to rent reimbursed by the
out, or to obtain a expatriate would have
incurred on comparable employer tax free.
normal market rental
accommodation in
for, accommodation 49. The cost of heating,
retained in the home his/her home country. electricity, gas, water
country; 47. Actual costs in the home and similar normal
country can be used as living expenses may not
– travelling expenses be included in
resulting from the basis for the
evaluation, using computing the above
emergencies (death or excess figure. Any
receipts for rents paid,
serious illness of close reimbursement of this
members of his/her lease agreements, and
the taxable or rateable category of expense by
family or spouse); the employer is added to
value of property. Costs
may alternatively be the employee's taxable
– exchange-rate
estimated using income. Therefore, only
fluctuations;
comparative tables or rent and rent-equivalent
– tax equalisation; statistical publications payments (or 125/60 or
such as Mica 380/60 of the indexed,
– travel expenses of registered cadastral
International Transfers
children at school income value for
or ORC International
abroad to visit their expatriate house-owners
Compensation Tables,
parents, not exceeding or those in receipt of
provided it is group
two trips per year. free accommodation
policy to use these
publications in directly owned or rented
45. Care should be taken to
determining allowances by the employer) can be
retain all supporting
to be granted to taken into account in
vouchers, which have to
employees sent abroad. computing this
be produced to the
Alternatively, the allowance.
Belgian tax authorities
on request. The ways in allowance can simply be
which more- fixed as the difference
controversial tax-free between actual rentals
allowances are paid in Belgium and 12%
determined are set out of the foreign base
below. salary.
International Assignment Taxation Folio 15Cost-of-living allowance Tax equalisation 55. Any excess therefore
50. Any increase in the cost 52. An employer may grant forms part of the
of living in Belgium expatriates non-taxable employee’s gross taxable
compared with the cost allowances equal to the pay.
of living in an additional tax burden Expatriates on a gross
expatriate's home resulting from their salary inclusive of expenses
country can be employment in Belgium.
reimbursed as a non- Precise, detailed 56. When an expatriate's
taxable allowance. Such supporting evidence is contract provides
increases, if relevant, required. him/her with a salary
can be identified from inclusive of all expenses,
figures provided by 53. Very frequently, Belgian the foreign base salary
economic and statistical tax is higher than tax at has to be calculated and
studies accepted by the comparable salary levels expenses analysed in
Belgian tax authorities, in an expatriate's home order to identify those
provided they are used country. In order to that are non-taxable.
as a matter of group neutralise the
unfavourable effect on 57. An expatriate's foreign
policy. base salary may be
his/her net
School fees remuneration, it is calculated from salary
accepted that the scales used by the group
51. For children aged six or in the home country.
older in primary or employer may meet the
additional tax burden. Failing these, the
secondary education in Belgian gross salary is
Belgium, school fees and Limits multiplied by a country
the cost of local
54. In any case, apart from index provided by the
transport are treated as Belgian tax authorities,
non-taxable expense school fees and non-
recurring costs and after deduction of an
allowances. Payments by
expenses, all other expatriate premium of
an employer for board 10% (or 15% for non-
and lodging in boarding expenses are considered
taxable to the extent European countries).
schools and for the cost
that they exceed all The following country
of private lessons are indexes apply for
taxable fringe benefits. together:
assessment year 2018:
When children are
– EUR 11,250 for
educated abroad, the expatriates working in
Country % Country % Country %
additional costs arising commercial and Austria 100 Ireland 100 Sweden 80
due to the distance from Canada 100 Italy 90 Switzerland 100
industrial operating
home, such as the cost Denmark 100 Japan 60 Turkey 90
units; or
of full board and lodging Finland 85 Netherlands 100 United 90
Kingdom
in boarding schools, – EUR 29,750 for
France 85 Norway 100 United 100
may be accepted as a expatriates in States
tax-free allowance. recognised control and Germany 100 Portugal 75
However, each case is coordination offices or Greece 75 Spain 90
examined on its merits laboratories and
and supporting vouchers scientific research
are essential. centres.
16 Human Resources Services58. The same types of tax- are paid on a gross travel, and progressive
free allowances are basis, so that the non- lump sum professional
available (under the taxable allowance is expenses (up to a
same limits) to an equal to the positive ceiling of EUR 4.720);
expatriate on a gross difference between the and
remuneration package actual rentals paid in
as are available to an Belgium and 12% of the – the foreign income tax
expatriate who is foreign base salary. calculated on the base
reimbursed separately salary in the home
for expenses, but the Cost-of-living allowance country, after
computation of the tax- 61. Once the foreign base deducting applicable
free elements is salary has been local social security
different, as shown in determined as explained contributions and
paragraphs 59 to 64, in paragraph 57, above, standard tax
below. the non-taxable allowances/deductions
allowance representing available in the home
Housing allowance the increase in cost of country.
59. To determine the non- living is fixed at 5% of
taxable allowance, the foreign base salary,
priority is given to actual subject to a ceiling of
costs (for example, EUR 2.500.
actual rentals paid in
Belgium and in the 62. The restriction on the
home country). Failing use of international
this, the allowance can statistical publications,
be fixed as the positive also applies to cost-of-
difference between living allowances.
actual rentals paid (or Tax equalisation
125/60 or 380/60 of the
indexed, registered 63. The non-taxable
cadastral income figure allowance for tax
for expatriate house- equalisation is
owners or those in calculated as the
receipt of free difference between:
accommodation directly
– the Belgian income tax
owned or rented by the on the base salary in
employer) and 12% of the home country,
the foreign base salary. before deducting the
60. International statistical 10% or 15%
publications cannot be expatriation premium,
used, unless they form but after deducting
part of the employer’s Belgian personal social
international security contributions
expatriation policy. This (13,07%), the excluded
is not practicable, proportion of salary
however, when people relating to foreign
International Assignment Taxation Folio 17Other deductions Exclusion for services 66. The following
64. In addition to the rendered abroad calculation is done to
allowances discussed in determine the exclusion
65. In addition to the for services rendered
paragraphs 59 to 63
non-taxable allowances abroad:
above, other expense described above,
allowances such as services rendered to a Annual taxable income
home leave (normally
company located outside multiplied by the travel
not exceeding one trip Belgium and that can be exclusion percentage
per year to the country identified as such are
of origin), whether Number of
not subject to Belgian
recurring or non- taxes although pay Travel working days
recurring, may be exclusion % spent abroad
details must be
deducted from the gross = Total working
reported. In the absence
salary to the extent that of identification, the days in the period
they can be justified. proportion of overall pay
Note that school fees
relating to working days
should be reimbursed by spent abroad will be 67. The "total working days
the employer separately taxed in Belgium. It in the (tax) period” (in
in order to avoid their should be emphasised Belgium and abroad)
being taxable. An that an expatriate is may not normally
example of how under the obligation to include Saturdays,
allowances are report the total Sundays, Belgian public
determined for an worldwide earned holidays, sick-days or
expatriate on a gross income received from annual vacation (even if
remuneration package is the individual actually
group entities even if
set out in Appendix D. salary paid abroad does worked during these
not relate directly to days).
his/her assignment in
Belgium, but relief for
services rendered to the
group outside Belgium
is granted by the Belgian
tax authorities. Please
note that it is very
important for each
expatriate benefiting
from the special tax
regime to keep proof for
each business travel day
spend abroad of (1)
his/her presence abroad
and of (2) the
professional character of
the trip.
18 Human Resources Services68. In calculating the a resident and is benefitting from the
number of working days likewise added to other special tax regime as
abroad, the day of Belgian-source income well as other non-
departure is considered such as real estate residents are only
as spent in Belgium with income or directorship entitled to personal
the exception that one- fees received from a deductions (basic
day trips abroad are Belgian company. personal deduction,
accepted as qualifying Investment income deduction for children at
days spent abroad. The sourced in Belgium or charge, marital quotient,
day of return is deemed abroad is excluded from etc.), and some tax
to be spent outside taxable income but it reductions at federal
Belgium. In addition, should be noted that, in level (child care
weekends and public certain circumstances, expenses, donations..)
holidays must be such income may be provided that they earn
excluded even if they are subject to Belgian at least 75% of their
spent abroad on withholding tax. worldwide professional
business trips. income in Belgium
71. An expatriate will also (limited exceptions
69. In case of a tax audit, be able to deduct apply however to
the expatriate must be compulsory Belgian or expatriates who remain
able to provide, for each foreign social security residents of France,
day claimed as a foreign and lump-sum business Luxembourg and the
business day, double expenses from his/her Netherlands). Moreover,
evidence of (1) his taxable income, in order to be entitled to
presence abroad, and (2) calculated as a Regional tax benefits in
the business nature of percentage of earned Belgium (such as
the trip (assignment income, up to a ceiling services cheques, roof
instructions, hotel bills, of EUR 4.720, in the isolation for own
air tickets with boarding same way as a Belgian- dwelling…), those non-
pass, passport visas, resident taxpayer. An residents must have
etc.). In case this double expatriate also has the maintained tax
proof cannot be option to deduct actual residency in another
provided to the tax business expenses Member State of the
inspector, each day instead of the lump-sum European Economic
which cannot be amount. Area (which in practice
supported by sufficient is usually not the case).
evidencing document 72. The 6th Reform of the
will be rejected, and tax State, applicable since 74. The sections in the rest
relief will not be granted income year 2014, has of this chapter
for those days which limited however essentially relate to
cannot be justified. drastically the other tax resident taxpayers.
deductions/reductions
Rates and deductions available to non-
70. The taxable income of a residents working in
non-resident is subject Belgium.
to tax at the same rates 73. Indeed, since income
as the taxable income of year 2014, expatriates
International Assignment Taxation Folio 19Social security collar workers) range of 8 August 1983) may,
contributions and benefits between 25% and 28%. under certain
75. The Belgian social conditions, be paid free
A special contribution of Belgian social security
security system provides
based on car CO2 contributions. The
for benefits to be paid to emissions is due by the
persons who work or Belgian social security
employer where a authorities explicitly
have worked in Belgium.
company car can be used state that the exemption
These benefits are for private purposes by
substantially financed from social security
an employee subject to contributions applies
by compulsory
Belgian social security. where these allowances
contributions from both No employee CO2
employers and are granted in
contribution is due. connection with a
employees. Social
security covers old age transfer or secondment
In addition, a special
pensions, monthly lump-sum from a foreign group
unemployment benefit, social security company or where the
sickness and disability person was directly
contribution is withheld
payments, family from the employee's net recruited abroad in
allowance, industrial salary. It varies from nil order to be temporarily
accident and health care employed in Belgium.
to EUR 60.94 per month
costs. The last of these depending on the Since 1 January 2012,
are not covered in full quarterly amount of for expatriates
and additional private wages subject to social benefitting from the
insurance may be security contributions. special tax regime with
advisable. There are also The final annual the limit of the costs
minimum regulations contribution varies from proper to the employer
on holiday entitlement. nil to EUR 731.28 and (CPE) of EUR 11,250,
depends on the annual the amount exempt
76. Employee social security from social security can
net taxable income
contributions are reported in the be grossed-up to take
withheld at source and employee’s tax return. into account the travel
paid by employers to the exclusion percentage.
Settlement between the
National Social Security monthly contributions For example, if the limit
Office, which is withheld and the final of EUR 11,250 is
responsible for reached and the
annual contribution due
administering the social is calculated by the tax expatriate has a travel
security system. authorities via the exclusion percentage of
20%, the amount
77. Contributions are made income tax assessment.
exempt from tax is EUR
as a percentage of gross 78. Expatriate allowances 11,250 and the amount
salary, with no upper that are exempt from exempt from Belgian
limit. At present, the social security is equal
Belgian income tax
employee's under the special tax to EUR 14.062,50 (EUR
contributions are regime granted to 11,250/
13.07% of gross salary, (1-0.20)).
certain foreign
and employer's
executives (practice note
contributions (for white-
20 Human Resources Services79. EU Regulation social security system of 81. Non-EU nationals
883/2004, last modified their home country employed in Belgium by
by EU Regulation provided their work in a Belgian employer or a
465/2012, replaces the their home country is at Belgian place of
former EU Regulation least 25% of their time business of a foreign
1408/71 since 1 May or turnover. employer are in
2010. Under this new principle subject to the
EU Regulation, Employees who work in Belgian social security
applicable in the two or more Member system. However,
European Economic States for two or more workers assigned to
Area (EEA), an employers remain Belgium from a non-
employee may apply on always affiliated in the EEA country can also
a form A1 (old form Member State of their remain under their
E101) to remain subject residence. home social security
to the social security Individuals who are scheme and being
scheme of his/her home simultaneously exempt from social
country, provided that security in Belgium if a
employed in one
he/she remains linked Member State and self – bilateral social security
with his/her employer in employed in another agreement concluded
his home country, and with Belgium can be
Member State are only
that the duration of subject to social security invoked. In this respect,
his/her secondment of the country in which Belgium has concluded
does not exceed 24 they perform their social security
months. It is possible, employee activities. agreements with several
for a temporary countries including the
assignment, to extend EU Regulation US, Japan, Australia,
this period for one year 883/2004 provides for a India, Canada, Quebec,
and, in certain cases, to ten-year transitional etc.
obtain special period during which the
agreement from the existing employment Please note that since 1
social security situation remains January 2011 the
authorities of both covered by the former Regulation 883/2004
countries to allow a also applies to third
EU Regulation 1408/71
period of up to five years unless the employee country nationals. This
from the outset (three would explicitly request implies that a third
years for a secondment country national posted
that the new Regulation
from Denmark). applies. It is highly in Belgium (or in
recommended to seek another EU Member
80. Under the Regulation State) who also works in
advice when planning an
883/2004, residents of one or several other
assignment to Belgium.
EU Member States who Member States for more
are performing than 5% of his working
employment duties for time per country will be
one employer in their subject to the social
home country and in security of his place of
Belgium normally residence (here :
remain subject to the Belgium).
International Assignment Taxation Folio 2182. There is a social security 80) remains applicable expempted for the first
treaty with the United in this case. EUR 640.
States under which US
nationals seconded to Tax treatment of 86. Foreign interest and
Belgium for periods of self-employment income dividends collected
up to five years may 84. Resident individuals are abroad by resident
elect to be excluded liable to Belgian income taxpayers must be
from the Belgian social tax on the worldwide declared in their annual
security system profits generated from tax return for the net
provided they continue their business or amount (so after the
to participate in the US independent profession. deduction of the foreign
FICA system during that Profits from a business tax withheld at source)
period. In certain or profession also and the flat-rate tax is
circumstances, it may be include capital gains on paid on assessment.
possible to apply for an the sale of business Please note that
extension to the five- assets, although a pursuant to an arrest of
year period. One favourable tax treatment the European Court of
prerequisite is that US applies if these assets Justice, communal taxes
expatriates may not be have been held for more should no more be
on the payroll of the than five years. Self- applied on these foreign
Belgian entity where employed expatriates do interest and dividends.
they work, although the not qualify for the The treatment of income
overall cost can be special tax regime from capital received by
charged to the Belgian described earlier. expatriates who benefit
entity. from the special taxation
Tax treatment of regime is explained in
83. The US social security investment income paragraph 7.
administration has to 85. Income from capital
provide a certificate of 87. Interest paid to non-
includes interest,
coverage showing that residents is usually
dividends or other forms exempt from
the expatriate continues of investment. Interest
to be affiliated to the US withholding taxes in
and dividends paid out
social security scheme. Belgium. Belgium
and collected via a applies in this respect,
It will therefore be Belgian financial
helpful for a US the system of exchange
institution are, in
employer intending to of information as
principle, subject to a provided by the EU
second an employee to flat-rate tax of 30%.
Belgium to make a Savings Directive since 1
Interest from ordinary
timely application to the January 2010. Further
savings accounts is information can be
relevant US authority so exempted from taxation
that a certificate of obtained from our
up to a limit of EUR 960
coverage can be issued. offices as listed in
(income year 2018). Any
Please note that the rule Appendix E.
interest exceeding this
on simultaneous amount is subject to tax 88. For each taxpayer, the
employment as at a rate of 15%. As from first EUR 960 of
described above (point income year 2018, authorised savings bank
dividend payments are account interest is
22 Human Resources Servicesexempt from the 15% Belgian resident Wealth taxes
withholding tax and taxpayers fall within the 92. As from income year
must not be reported in scope of this tax (non- 2018, the Belgian tax
the tax return (income residents are excluded). authorities have
year 2018). The tax applies to all introduced a tax on
transactions (disposal securities accounts. For
89. Local property tax and acquisition for a individuals taxpayers
(précompte immobilier - consideration) of
onroerende voorheffing) who are residents of
Belgian or foreign Belgium, a flat 0,15%
is assessed on 'cadastral securities (including rate will be imposed on
income', i.e. the deemed shares, bonds,
rental value attributed certain qualifying
share/bond certificates, financial instruments
to the property by the etc.) realized by a that are held via their
authorities. Some Belgian tax resident.
reductions are provided Belgian and non-Belgian
If the transaction is securities accounts. For
for occupancy. Property handled via a Belgian individuals who are non
tax is levied at a rate financial institution, the
that varies according to resident taxpayers of
reporting and the Belgium, only the
the municipality and withholding of the taxes
location of the property. Belgian securities are
will be done taken into account for
Rates generally range automatically by the
between 20% and 50% the application of the
later. The following tax 0,15% taxation. The tax
of the 'cadastral income'. rates apply: on the securities account
90. Owners occupying - 0,12% on bonds is due only when the
residential houses are average and combined
taxed on the notional - 0,35% on other value (of the qualifying
rental income (’revenu securities instruments held via the
cadastral/kadastraal securities accounts)
inkomen’). Properties - 1,32% on the reaches or exceeds EUR
rented out are taxed on purchase of own 500.000 (per account
the notional rental capitalisation shares of holder).
income or on the an investment company.
effective net rental
income received (after 93. A hidden wealth tax
deduction of lump-sum Various forms of income exists also in the form of
rental expenses). 'Non- a transfer tax
91. This category includes
resident' expatriates are casual earnings, awards, (“registration duties”)
liable to tax on Belgian alimony receipts and on the sale or transfer of
real estate only. those capital gains that real property (buildings,
Stock exchange transaction are taxable. Income land) other than newly-
tax falling within this constructed houses and
category is often taxed other buildings subject
In 2017 the Belgian tax at fixed rates, mainly to VAT at 21%. Transfer
on stock exchange 16.5% and 33%, plus taxes are levied by the
transactions has been Regions and the rates
local tax.
enlarged. Note that only depend on each Region.
International Assignment Taxation Folio 2394. For properties located in other conditions Resale or a transfer of
the Walloon Region the are met. the real property by
rate amounts to 12,5%. notarial deed within two
Tax is computed on the If the conditions for this years following the date
sale price, or the reimbursement are not of the duly certified deed
assessed market value if met, resale or transfer of to purchase the property
higher, and is paid by the property by notarial entitles the seller to
the buyer. It should be deed within two years of reclaim 36% of the
noted that a resale or the date of the duly transfer tax paid on the
transfer of real property certified deed to acquisition.
by notarial deed within purchase the property
two years from the date entitles the seller to Church taxes
of the duly certified deed reclaim 3/5 of the 97. There is no church tax in
to purchase the property transfer tax paid on Belgium.
entitles the vendor to acquisition.
reclaim 3/5 of the 96. A transfer tax of 12,5% is
transfer tax paid upon
levied on sales or
acquisition. transfers of real
95. For properties located in property located in the
the Flemish Region the Brussels-Capital Region.
tax rate amounts to 10%. Tax is computed on the
The Flemish Region has higher of the agreed sale
however recently
price and the fair market
announced its intention value of the property.
to reuce this rate to 7%. However, an exemption
The first bracket of EUR of EUR 175.000 (for
15.000 for the purchase purchases as of 1
of a main residence that January 2017) is granted
is the taxpayer’s sole for the acquisition by
property is currently one or more natural
exempt from transfer persons of a property
tax. intended to become a
main residence,
Furthermore a provided it is the buyer’s
reimbursement or sole property and the
deduction, as the case taxable amount (i.e.
may be, of the transfer purchase price and
tax paid on the additional expenses)
taxpayer’s previous does not exceed EUR
home can be claimed (up 500.000.
to a maximum of EUR
12.500) provided the This exemption is not
new home is also granted for the
purchased in the acquisition of
Flemish Region and undeveloped land.
24 Human Resources ServicesStep 3:
What to do before you arrive in Belgium
Work permits, residence need to earn a certain 100. A duty of prior
formalities and "Limosa" minimum gross annual electronic notification is
98. If you are a European salary in order to be imposed for all
Union (EU) national, granted a work permit. foreigners working
you do not need a work (even temporarily) in
99. Depending on the Belgium and who are
permit to work in duration of your stay in
Belgium. If you are a not subject to Belgian
Belgium and your social security, including
national of a non-EU nationality, you need to
country, you need a seconded employees and
carefully check the the self-employed. This
work permit or a required residence
professional card (as a duty of notification is
formalities before you referred to as the
self-employed person)
arrive in Belgium. Non- "Limosa" obligation.
unless you are employed EU nationals who stay
(as an executive or Notification is required
in Belgium for a period for any employee who is
researcher with a
exceeding three months employed in Belgium
Belgian contract) in a require applying for a
recognised coordination temporarily or partially
type D visa from the and normally works in
centre, which exempts
Belgian one or more countries
you from the embassy/consulate in
requirement to obtain a other than Belgium or is
their country of origin. hired in a country other
work permit. Other
In the Belgian than Belgium. It also
work-permit exemptions municipality where they
also exist (in the form of applies to any self-
will live, they need to be employed person, who
a limitative list), such as
registered and obtain a either sets up
for business trips Belgian residence
(exemption limited to temporarily in Belgium
permit. EU nationals do in order to carry on one
five days per calendar not require a visa but
month) and for certain or more self-employed
need to obtain a activities here, or
managerial employees 'declaration of
employed by Belgian temporarily or partially
registration' from their carries on self-employed
headquarters. If you do local authority in
not qualify for an activities in Belgium but
Belgium. Special rules normally works in one
exemption, a work apply to family members
permit has to be applied or more countries other
(for purposes of ‘family than Belgium and does
for. Highly qualified reunification’).
employees and not permanently reside
managerial employees
International Assignment Taxation Folio 25in Belgium. Very limited 'treaty country', the rendered in or for the
exceptions apply. ‘exemption with two countries, will
progression’ principle produce tax savings.
Employment contracts applies in Belgium to Where your non-Belgian
101. It is strongly advisable your overseas earned employer is located in a
for all the terms and income provided the tax non-treaty country, your
conditions of your treaty allows for such foreign income is
assignment to Belgium exemption. The subject to tax in Belgium
be set out in a written exemption with at half the normal rate,
agreement before you progression reserve provided it has been
are actually transferred means that income subject to foreign tax.
to Belgium. which is exempted from
taxation in Belgium Remuneration packages
102. The authority of your based on the double tax 106. We outlined above the
employer to transfer you treaty concluded tax consequences of
to a group entity in your between Belgium and receiving a salary and
home country, or the other country will separate reimbursement
elsewhere, will normally not be taxed in Belgium of expenses, or of being
be included in your but will be taken into on a gross remuneration
employment contract. account to determine package inclusive of
103. Consideration needs to the marginal tax rate expenses. Employers
be given to whether you applicable to the other will need to examine the
should apply for the income taxable in overall cost to both the
special tax regime on a Belgium. Depending on company and the
net or gross the other country, employee before
remuneration package. income exempted from deciding which method
taxation in Belgium may is appropriate. Generally
104. If you are an however remain subject speaking, the 'net'
(international) assignee, to communal taxes. remuneration package is
resident and employed Please note that the tax more tax-effective, as
in Belgium, and you do authorities are now the recurring costs and
not qualify for the looking more carefully expenses package for
special expatriate tax at the conditions to be which the employer is
treatment but carry out exempted in Belgium responsible will most
a significant amount of based on the wording of likely reach the tax-free
work outside Belgium, the tax treaty, and are ceilings of EUR 11,250
you may find it not granting this (or EUR 29,750 for
advantageous to have exemption automatically control and
separate employment anymore. Due to the coordination offices,
contracts with your application of laboratories and
Belgian employer and an progressive tax rates in scientific research
associated group most countries, a payroll centres). In the case of
company located abroad split between 'treaty gross remuneration
(i.e. a split payroll). countries', which packages, this is
accurately reflects frequently not the case.
105. Where your non-Belgian services and
employer is located in a responsibilities
26 Human Resources Services107. As far as coordination
offices are concerned, it
is unlikely that the tax-
free ceiling for
allowances of EUR
29.750 will be reached
without tax equalisation
being built into the 'net'
remuneration package.
108. The timing of payment
of a bonus connected
with an assignment to
Belgium should be
considered from the
outset. If a bonus is paid
after the assignment has
terminated, it may be
more beneficial from a
Belgian tax point of
view.
109. Stock options are taxed
in Belgium at the time of
grant, based on a lump
sum valuation, provided
that they are formally
accepted by the
beneficiary in writing
within 60 days from the
date of the offer.
Options which are not
so-accepted are taxed at
the time of exercise.
Special attention must
be made when dealing
with stock options in an
international context in
order to avoid double
taxation. For options
whose vesting is subject
to an employment
condition, taxable
income will be sourced
based on the territories
where the duties were
carried out during the
vesting period.
International Assignment Taxation Folio 27Importing personal 112. An application must be that the following means
possessions filed with the local of minimising the tax
110. A full exemption from customs office before or burden can be
value added tax (VAT) when goods are considered:
and customs duties is imported. Five copies of
the list of possessions – timing the arrival in
generally granted when Belgium;
personal possessions, being imported are
including a car, are required. – avoidance of dual
imported by a private 113. The imported goods residence and double
individual transferring cannot be sold or let taxation;
his/her normal place of within the 12-month
residence from another – deriving full benefit
period following their from the tax exemption
country to Belgium. duty-free importation. on investment income,
111. To be eligible for the Important points to in cases where the
exemption, the goods remember special tax treatment
must be owned by the applies.
importer and have been 114. Employers and
used at least six months expatriates are advised
before the residence is to consult a home
transferred to Belgium. country tax adviser and
a Belgian tax adviser
before the assignment
takes place, so
International Assignment Taxation Folio 28Step 4:
What to do when you arrive in Belgium
Establishing 116. Registration with the employment in Belgium
residence/domicile social security begins).
115. As an international authorities should be
done by your employer. 118. The application file
assignee intending to must include a formal
reside and work in You must select and
register with a request by the employee,
Belgium, you must go and sufficient
through certain 'Mutuelle/Mutualiteit'.
The local authority information to enable
formalities with the local the tax officers to verify
authority where you are where you live will
inform the local tax whether expatriate and
to reside. Depending on the company meet all
your nationality (EU or inspector of your arrival.
the qualifying
non-EU) the set of Application for conditions for non-
documents you need to non-residence status resident status and that
submit for registration the non-taxable expense
will be different. Non- 117. The administrative
formalities associated allowances being
EU nationals need to be
with the special tax claimed are justified.
able to present their
work permit, for regime are mainly the 119. The Belgian offices of
instance (unless they responsibility of the
PwC will be pleased to
qualify for a work- employer. Provided you provide clients with
permit exemption). The meet the various further advice on the
duration of your conditions, the employer
application procedures
residence in Belgium is required to file a and the documents and
(more or less than three formal application with information needed to
months) is also the Director for
support a successful
important in Foreigners (Directeur application. See
determining the type of Etranger – Directeur Appendix E for further
registration or Buitenland) at the
information.
‘declaration’. In the case Ministry of Finance
of registration for more (Federal Public Service
than three months, you Finance) within six
will receive an electronic months of your arrival
residence permit once (the six-month deadline
the registration runs as from the first
procedure is finalised. day of the month
following that in which
29 Human Resources ServicesYou can also read
