Taxes in Belgium: Filing your Belgian tax return
A guide to Belgian taxation in 2015 for expats, with up-to-date information on income tax, special expat tax status, VAT, property tax and other taxes in Belgium.
If you are a foreigner working in Belgium, you will be liable to pay Belgian income taxes and file a Belgian tax return, although some exceptions exist. Additionally, property tax and gift and inheritance tax may be relevant. In most circumstances there is no capital gains tax or wealth tax for individuals in Belgium, thus pushing the tax burden firmly onto the employee.
Taxation in Belgium is one of the highest in Europe. Belgian taxes amount to an effective rate of more than 50 percent for the highest earners (including social security), compared to an average 45 percent in Europe. Income tax and company tax are collected at state level but the municipal authorities also collect property tax and municipal tax. However, there is a special tax status for some expats whereby resident foreigners are treated as non-residents for tax purposes and enjoy generous tax allowances. The Belgian government also offers a range of tax deductions which can help reduce your Belgian tax burden.
Belgium’s high taxes rates have long been in contention with Belgium residents. The Belgian government, however, is working to improve Belgium’s tax situation with a raft of tax reforms introduced in 2015 to be implemented in the coming years.
Doing your taxes in Belgium can be a complex matter. The information given here provides a general overview only, and you should always get professional advice from a Belgian financial professional regarding your individual tax situation in Belgium.
Belgian tax reforms 2016: Who do they benefit?
Since the sixth state reforms announced in 2015, the government's aim will be to shift labour taxes to wealth and consumption, although there are no plans to change Belgium's effective tax rate (including social security) of more than 50 percent for the highest earners, according to Taxpatria.
Under the reforms, the Belgian government announced a number of changes that will affect Belgian residents, including:
- increased tax rate on investment income
- 21 percent VAT on electricity
- a health tax
- a Cayman tax.
As part of the Tax Shift Law 2016 several measures were introduced to increase professional net income, for example, the employer social security contributions will decrease from 33 percent to 25 percent over the next few years, which currently amounts to around 30 percent. The standard NSSO contribution for employees, however, remains unchanged at 13.07 percent.
On the employee's side, the tax reforms aim to increase net salaries through a combination of three measures: lump-sum business expenses, tax rates and the tax-exempt amount. The basic exemption for fiscal year 2017 (revenue of 2016) is EUR 7,130 regardless of marital status, with further exemptions for dependent children.
Under the tax reforms, the marginal income tax rates will also be gradually decreased. The new measures include a gradual abolition of the 30 percent rate and the expansion of the tax bracket of the 40 percent rate will be achieved in two steps, with the first changes implemented from income year 2016 and full implementation expected to be achieved by income year 2018.
Who has to pay Belgian taxes?
How much you are taxed depends on whether you are a resident or non-resident of Belgium. For taxation purposes, you are classed as a resident of Belgium if your family home is in Belgium or it is where you work.
If you are living in Belgium for at least six months (183 days) of the year and registered with your local commune, then you are classed as a resident and have to pay Belgium income tax on your worldwide income. Your taxable income is the income left after deductions for social security contributions, personal allowance, professional costs, etc.
If you live in Belgium for less than six months (183 days), you will only be taxed on the income earned in Belgium – including rents and capital gains – once you qualify as non-resident status.
Special tax concessions for expats: Non-resident tax status
Expatriates who satisfy specific conditions can apply for a special taxation regime and pay Belgian tax only on income related to professional duties carried out in Belgium.
The conditions require that employment must be by an international group or in a scientific research centre, and must be temporary. A foreign executive assigned temporarily to Belgium may qualify, for example, but the conditions are quite strict. Also, the expatriate’s centre of personal and economic interest must not be Belgium.
In determining the latter, the authorities take the following into account:
- the ownership of real estate, personal property or securities abroad;
- a life assurance contract written abroad;
- the inclusion of a diplomatic clause in the Belgian rental agreement for accommodation;
- continued affiliation to a group pension scheme abroad;
- renewal of credit cards issued by banks abroad;
- continued affiliation to a social security scheme abroad;
- continuing to act as an officer of a foreign company.
If you qualify for the above, you will be classed as a 'non-resident' taxpayer and can claim specific allowances and deductions. As a non-resident, you will only be taxed on Belgian-earned income – instead of worldwide income – although tax rates are the same for everyone. Certain other expenses are also tax-free – such as cost of living, housing, school fees – of up to EUR 11,250, or exceptionally up to EUR 29,750 for scientists. To obtain expat tax status you and your employer must apply to the Belgian tax authorities within six months of the beginning of the month after the month of arrival in Belgium.
However, under the recent tax reforms, foreign executives with expat tax status who live with their family in Belgium will no longer benefit from several personal tax free allowances, unless they earn at least 75 percent of their total taxable professional income during the tax year in Belgium. It may therefore be advisable in some cases to limit the annual foreign business travel to a maximum of 25 percent.
Dual taxation agreements
Belgium has signed over 90 conventions with other countries to avoid double taxation (ie. paying tax in your home country and in Belgium). See this Federal Public Service Finance list to see the up-to-date list of countries.
Paying taxes in Belgium
The tax year runs from 1 January to 31 December.
If you are an employee then your employer will deduct your income tax (impôt des personnes physiques or personenbelasting) from your salary on a monthly basis, which is known as the Précompte Professionnel/Bedrijfsvoorheffing. Similarly, the self-employed or paid company directors have to pay monthly tax in advance via a collecting agency or bank. Regardless, everyone resident in Belgium and non-residents taxed on Belgian-sourced income have to file an annual Belgian tax return.
You will usually receive a tax return in May–June (déclaration/aangifte) relating to the previous year's income. This must typically be returned by the end of June, although you will find the exact date on your tax return. If you use the ‘Tax-on-Web’ online filing system, you are traditionally allowed some extra time. Non-residents file their return at the end of September/beginning of October.
If you don’t submit your return by the deadline, you may face a fine and the tax authorities may estimate how much tax you need to pay. You can track the progress of your tax return through FPS Finance application Minfin.
You will be taxed on your earned income minus your mandatory social security contributions, personal allowances, dependent spouse allowance and professional costs (as an actual amount or fixed standard cost). As well as income earned through employment or self-employment, other taxable income incudes income from real estate and investments.
Calculating your Belgian taxes
Residents of Belgium pay personal income tax on their total income from all worldwide sources on a sliding scale.
Belgian income tax rates for 2017 (tax year 2016):
- Up to EUR 10,860: 25 percent
- EUR EUR 10,860 – EUR 12,470: 30 percent
- EUR 12,470 – EUR 20,780: 40 percent
- EUR 20,780 – EUR 38,080: 45 percent
- EUR 38,080+: 50 percent
Residents also pay municipal and regional taxes that typically range 0–9 percent. For non-residents, an average 7 percent municipal tax is taken into account, irrespective of whether the municipal taxes are levied in the commune.
Income tax is paid on the taxable base, which is determined from salary less compulsory social security contributions (paid either in Belgium or abroad). Professional expenses can be deducted either directly with supporting documentation or more usually on a lump sum basis depending on the salary level. The maximum lump-sum deduction for employees in 2016 is EUR 4,240.
Work out how much income tax you will have to pay in Belgium using this online income tax calculator.
Filing your Belgian tax return
You can pay tax by post to your local tax office (the address will be on the top of your tax return) or online using a Belgian eID through the Belgian government’s tax portal Tax-on-web.
If you are non-resident with a Belgian-earned income, then you have to inform your competent tax collectors office, who will send you a tax return every year. You can also pay by post or online.
The deadline for paying online is usually later than the postal deadline.
Spouses and registered partners
If you are married or in a registered civil partnership you need to file a joint tax return but your incomes will be taxed separately. If only one of you is earning, 30 percent of the income can be attributed to the non-earning partner and taxable at a lower rate (up to EUR 10,200 in 2014). This is known as the dependent spouse allowance. If the income of the second earner is less than the maximum amount, then the additional income from the primary earner is attributed to the secondary earner up to the maximum amount.
Personal allowances and tax credits in Belgium
The basic personal allowance is EUR 7,070; if you have one child it is EUR 1,500, for two children it is EUR 3,870, for three children it is EUR 8,670 and so on. As a rule, non-residents who don’t own a home in Belgium nor earn at least 75 percent of their income in Belgium can’t claim personal allowances.
Tax credits in Belgium include:
- Charitable donations
- Capital and interest payments in relation to a mortgage
- Pension plan contributions
- Life insurance plan contributions
- Child-care expenses
- Energy saving investments.
Social security payments in Belgium
Social security is paid on top of earned income. If you’re employed your employer pays part and you pay another, smaller part (which worked out to be 35 percent and 13.07 percent respectively in 2014).
Self-employed workers pay the amount themselves but it is capped at EUR 15,905 per year.
VAT in Belgium
In Belgium, VAT is called Taxe sur la Valeur Ajoutée (TVA) or Belasting over de Toegevoegde Waarde (BTW) and is payable on most goods and services. The standard rate is 21 percent, while there are lower rates for certain categories of goods and services. A rate of 12 percent is applied to food served in restaurants and social housing, while a rate of 6 percent applies to most basic goods, such as food, water supply, books and medicines. Daily and weekly publications and recycled goods are typically rated at zero percent.
Other taxes in Belgium
Property tax – Précompte immobilier/Onroerende voorheffing (PI/OV)
This is an annual tax on property owners (not tenants), based on ownership as at 1 January of each year. The amount is calculated on the presumed annual rental value (revenue cadastral/kadastraal inkomen) attributed to the property by local authorities. The tax paid varies according to the commune and the region. In the Flemish region it is generally 2.5 percent of the annual deemed rental income, while in the Walloon and Brussels region it is approximately 1.25 percent.
Municipal taxes for TV, rubbish, water, etc. are levied by the regions/provinces and municipalities (communes/gemeenten) at rates of up to 9 percent, calculated on the amount of income tax you pay.
Non-residents don’t pay municipal tax but pay instead a federal tax at a flat rate of 7 percent on income tax.
Inheritance, capital gains and gift tax
Inheritance tax is payable on the total value of the estate of a person settled in Belgium, or any property owned in Belgium if they are not settled there. Heirs pay tax on their share. Those working for the EU, NATO or similar organisations are exempt.
Capital gains tax is payable on the difference between the original purchase price and the final sale price on property and land sales. Gift tax is a tax on financial gifts to relatives.
The basic rate of business taxation is 33 percent. To find out more about taxation for businesses and the self-employed in Belgium, read our guide to taxes and social security for freelancers and the self-employed in Belgium.
- The Ministry of Finance (Service Public Fédéral Finances) provides information on all aspects of taxation, most of which is available in Dutch and French, or you can call +32 (0)2 572 5757 (8am to 5pm). You can track the progress of your tax return through FPS Finance application Minfin. To find your local FPS Finance office, click here.
- Portail de la Wallonie has information in French on regional taxes in Wallonia.
- Vlaanderren.be has information in Dutch on regional taxes in Flanders.
- Find an accounting expert (expert-comptable/compte fiscal/accountant/belastingconsulent) through the website of the Instituut van de Accountants en de Blastingconsulenten (French or Dutch only).
- How to calculate your total taxable income in Belgium
- What expenses can I deduct from my Belgian taxes?
- Tax benefits for buying a house in Belgium
- Taxes and charges for freelancers and the self-employed in Belgium
Need advice? Post your question on Expatica's free Ask the Expert service to see if we can help.
Updated 2012, 2014, 2015.
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