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 th This memorandum is designed to The 6 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 when he/she is deemed residence of married 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 income tax payable. 14. Employment income is determining the tax base and assessing the tax Non-residents have to defined broadly and pay a similar additional includes all fringe due on that base. Taxation is charged on a tax at a fixed rate of 7% benefits provided by an of the total income tax employer.