• Narrow screen resolution
  • Wide screen resolution
  • Auto width resolution
  • Increase font size
  • Decrease font size
  • Default font size
  • default color
  • red color
  • green color

taxation.be

Sunday
Jun 16th
Home arrow Home

Belgium

PDF  | Print |  E-mail

Belgium is a federal state, with three Regions and three Communities, ten Provinces and 598 municipalities or communes.

The federal state structure has gradually evolved over the years (click here for a good summary in French). It is complicated by the fact that the Regions and the Communities overlap.

  • The Regions are mainly a geographic indication. The Brussels Capital Region is wedged between the Flemish Region in the north and the Walloon Region is the South.

  • The Dutch-speaking Community mainly covers Flanders and the Dutch speakers in Brussels, the French-speaking Community deals with the French speakers in Brussels and Wallonia, while the German-speaking Community is located to the east of the Walloon Region.

Taxes are levied at the federal state, regional, provincial and municipal level.

< Prev   Next >
Advertisement
Home
Individuals
Companies
Estate Planning
International
News
Links
taxbites
Money

Newsflash

The social security authorities (Rijksdienst voor Sociale Zekerheid / Office National de Sécurité Sociale) have extended the social security benefit for expatriate executives.

The Belgian expatriate tax regime for non-Belgian executives

Non-Belgian executives who are seconded to come and work in Belgium for a period of time can have the benefit of a special tax regime that is comparable to the Dutch 30 % regime. The special tax regime is based on a Practice Note of 8 August 1983. If they meet the conditions, they can be treated as non-residents in Belgium if their employer’s application is accepted. They must work for a multinational group or a research centre, the executives must not have Belgian nationality, they must have special knowledge or experience, be seconded to Belgium for a period of time and keep the centre of their personal and economic interests outside Belgium.

The benefits of the expatriate tax regime are that they are treated as non-residents and only taxed on their Belgian-source income.

This means - in the first place - that the Belgian acknowledge that their employer can pay them tax free allowances to cover the additional expenses incurred as a direct result of their secondment to Belgium.  These allowances include a cost of living allowance, a housing allowance and a tax equalisation allowance. If calculated in accordance with a specific practice note, these allowances are not taxable for the 'expatriate' employee, if they do not exceed € 11,250 (€ 29,750 for executives working for R&D and coordination centers) ; there is no limitation for school fees for children in primary and secondary education.   

Moreover, these executives are not taxed on the part of their remuneration that relates to work outside Belgium. E.g. if they travel (for work) for 30 % of their time, they are only taxed on 70 % of their remuneration.

Finally, as they are considered non-residents, they are not taxed on any income from investments.

Social security

The social security authorities used to take the position that only the tax free allowances were exempt from social security.  However, they have recently relented to make Belgium and the expatriate tax regime more attractive. They have agreed that the employer can gross up the tax free allowance with the travel percentage (30 % in the example above), as long as these grossed up allowances did not exceed € 29,750.

A couple of examples may help clarify this.

If an employee received tax exempt allowances for € 6,000, only these € 6,000 were exempt of (employer’s and employee’s) social security contributions. Now, the employer can calculate the exemption as € 6,000 / (100-30) = € 8,751.

A colleague who has tax exempt allowances for € 10,000 but travels outside Belgium for 70 %; will benefit from in exemption of € 10,000 / (100-70) will not be exempted on € 33,333 but on € 29,750 as this is the overall limit.

This new position will have retroactive effect until the beginning of the year.