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taxation.be

Sunday
Jun 16th
Home arrow Individuals arrow Expatriates

General

The expatriate tax regime is the common name for the 'special tax regime for foreign executives temporarily assigned in Belgium.

As long ago as 1983, Belgian introduced this special tax regime to make it easier (cheaper) for multinational companies to assing executives and specialists to Belgium.

In principle, non-Belgian employees seconded to Belgium are considered to be Belgian residents for tax purposes. They are liable to Belgian income tax on their worldwide income. However, by applying for this special tax regime, and demonstrating that they are "temporarily" seconded to Belgium, they can be taxed as non-residents. This tax regime has a double attraction.

  • When they qualify for the expatriate tax regime, non-Belgian executives are entitled to special concessions to cover the added cost of their secondment to Belgium (higher cost of living, higher rent, higher taxes, ...).
  • Moreover, because they are treated as non-residents, they must declare their worldwide earnings and their income from Belgian real property.
Investment income from Belgian sources is also subject to a withholding tax of 25 (dividends) or 15 percent (for interest), but that is the fnial tax. However, investment income from foreign sources remains untaxed in Belgium unless it is collected via a Belgian financial institution.  The expatriate executive will also not be liable to any capital gains tax, with the exception of certain capital gains from real property.
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