Belgium Summary Guide

Taxation of Business People in Belgium

A person is deemed tax resident in Belgium they are domiciled there (this usually relates to where a person is born, but can sometimes be changed) and/or their ‘central economic interest’ is in the country, or if they are resident in Belgium for a period greater than 183 days in a calendar year.

Resident taxpayers are required to pay tax on their worldwide income, while non-residents must just pay tax in Belgium on income sourced from there. Certain types of skilled workers, (including foreign executives, experts in their field, and directors) seconded by their employers to work in Belgium temporarily can sometimes benefit from the special expatriate tax regime, which permits taxation as a non-resident, in addition to other allowances and benefits.

Taxes are levied in Belgium on both a federal and municipal basis, and different types of income (professional income, property income, investment income, etc) can be taxed at different rates, resulting (when such income is aggregated), in progressive personal income tax rates of between 25% and 50%; there is also a local taxation element, usually representing 6-7% of the federal tax liability.

Married and co-habiting couples are jointly assessed, although personal income tax is payable, allowing a degree of income shifting, if one partner is a non- or low earner.

Non-resident taxpayers are taxed on Belgian-source income only, and are taxed as if it were for a full year, allowing the taxpayer to gain full annual allowances and pay using the same progressive tax bands as would be claimed by resident taxpayers.

Incorporated companies are taxed in Belgium at 33.99% (comprising 30%, plus a 3% austerity surcharge). There is a reduced corporate rate (variable, but can be in the region of 24.98%) for companies with taxable profits of EUR322,500 or less.

Individuals doing business on their own account, as a sole proprietor are likely to be treated as self-employed, and taxed under the personal income tax system. Self-employed workers must join a social insurance fund, paying a percentage of their net income to said fund.

Value added tax is imposed 21% (standard rate) on the majority of goods and services, with reduced rates of 12% and 6% imposed in certain circumstances.

Belgium Summary Guide Contents

Belgium Summary

Belgium Summary Chart

Belgium Residence

Taxation of Business People in Belgium

Living and Doing Business in Belgium

Business Forms in Belgium

Latest Comments

Expat Brit

Hi,

I am facing a dilemma and would like to invite any reader to advise me.

I am a Brit who has lived outside UK since 1993- initially in Belgium (5 years) & subsequently in 4 African countries. After a year outside UK, the UK Inland Revenue confirmed my status as ‘non-resident’ for tax purposes and as I have had no income in UK, I have not completed a UK tax return for many years. I visit UK very rarely, normally for one or two weeks per year.

In May 2011, I was made redundent by my employers, who were downsizing. This coincided with a move to retire in the Netherlands, where I now have official residency (my wife is Dutch). I thought that, at 63 years of age, I would be unlikely to find suitable employment; in fact, I have not tried hard and had resigned myself to permanent (but slightly premature) retirement.

However, to my surprise, I have recently been approached (through a mutual acquaintance) by a company that wishes to use my skills on a project in the Isle of Man. The role, if & when confirmed, would see me working for about 10 days a month in Isle of Man, with about 5-7 additional days per month, working from home. Contract will be for about two years. The firm has asked me to confirm if I would prefer to be paid (and therefore be taxed) in Netherlands or Isle of Man, the idea being that I create a self-employment entity for this employment. I have no data on which to base a response. Given Isle of Man's traditional ‘low tax ‘environment, are there any benefits to declaring an income in IOM? Are there any Isle of Man residency implications? Netherlands takes a tax cut on total world wide income, and, as I have never had any contact with the Dutch authorities, I am reluctant to start such a relationship now. Do I have to declare income in both countries, with a breakdown prorata to the time spent in each jurisdiction? Should I declare income to UK Inland revenue?

If anyone has pertinent advice on these points, I’d be grateful to hear them.

TJM @ Eindhoven, NL

T. Dog

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Purchasing investment-link insurance for my staff

Would that count as income tax to my staff? And would that count as expense to my company?Michael

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Irish crisis - effects on small business?

Hi all,

Just wondering if anyone 'on the ground', as it were, might be reading and able to help me...I was considering relocating my hairdressing business from the UK to Ireland before the economy started to go properly belly-up...now, not so much.

Are things as bad as they seem over there, or is it being over-hyped by the media? And is the government still keen to support small business people? Cos if not, I'll look elsewhere...

Thanks,Kate

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Jersey vs. Malta??

Hi, I live in South Africa, and along with 2 business partners (one in South Africa and one in Ireland - all South African citizens though) are setting up a company that designs Smart phone applications. As they will be sold on the various platforms (none of which operate out of South Africa)we have to list our company as operating out of Ireland anyway. As such, we have decided to set up our company in the best tax country and are wanting info on whether Jersey or Malta is best? If anyone has some inside info we would really appreciate it!! Thanks!Mary

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Living in France contracting to Australian company

I am moving full time to France in Jan 2012 where I will be working as a freelance contract engineer to a number of Australian based companies. It is my choice to move to France not a work requirement. I will be renting my house out in Austrlalia and renting a house while I am in France. I hold both EU & Austrlain citizenshiip. I am married with 2 young children. Approx total family income $100k AUD.
Do I pay tax in France or Australia or both ?
Any help or guidance would be much appreciated.France move

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