Expat tax in Belgium: How to claim non-resident tax status
Expatica's tax expert Gregory Goossens explains how to arrange your taxes after moving to Belgium and the tax benefits for non-resident Belgian tax payers.
After you start living in Belgium, you will typically need to register with the Belgian tax authorities and pay Belgian taxes, although some exemptions apply depending on how long you plan to live in Belgium.
Do not forget to register
If you've made the decision to move to Belgium then you need to notify the local authorities of your arrival. Both EU and non-EU citizens who plan to stay in Belgium longer than three months should register at the municipality where they are residing. The municipality will issue a ‘declaration of arrival' and register you in the local population register.
The requirement to register comes from civil law and does not result from any legal tax provision. However, registering in the local population register will have tax consequences. As soon as you are registered, your local tax inspector will be informed that you are now within his grasp.
As a result, you will become taxable in Belgium on your worldwide income like any other Belgian resident. In June of the year after your arrival, you will receive a tax return which you can file in paper or through the online ‘Tax-on-web' application.
Belgian tax resident or not?
People registered with the community are always presumed to be resident taxpayers – thus taxed on worldwide income – unless they can prove otherwise. If you can demonstrate that your principle place of residence or the centre of your economic interests remains located abroad, the tax authorities might consider you a non-resident taxpayer and only tax your Belgium-sourced income.
For this, you would need to prove that your stay in Belgium is only of a temporary nature (eg. your spouse or partner lives abroad, or you have real estate abroad, a foreign life insurance contract or continued affiliation to a foreign social security scheme, etc.).
As a general rule, the residency of married taxpayers is presumed to be located at the place of the actual family residence. In other words, if, for example, your wife and children move with you to Belgium, it will be practically impossible to get a non-resident tax status.
Furthermore, the tax authorities have the right to prove otherwise and demonstrate that you qualify as a resident on the basis of your personal situation (eg. living in Belgium together with a spouse or partner, opening a Belgian account, buying a car or a house in Belgium, etc.). Again, no single factor is decisive but all the circumstances will be taken into account.
The fact that you have the intention to move out of Belgium after a while does not automatically mean that you are a non-resident taxpayer. Again, only foreigners who do not have their principle place of residence or the centre of their economic interests in Belgium are eligible for this more favourable status.
However, some categories of taxpayers automatically qualify as non-residents:
- foreign diplomatic and consular agents assigned to Belgium;
- other members of foreign diplomatic and consular missions in Belgium and family members living with them;
- officials, agents and representatives of foreign states, regional entities or public law institutions also normally fall within the non-resident category.
What is the benefit of this non-resident status?
As mentioned, residents are taxable in Belgium on their worldwide income, while non-residents are only taxable on their Belgian source income (ie. professional income earned in Belgium, real estate income or movable income). Income not originating from a Belgian source will not be subject to the Belgian income taxes.
Employees who work in Belgium but don't establish their tax residency in Belgium are only taxed if the cost of their salary is paid (or borne) by a Belgian employer or if they spend more than 183 days per 12 months in Belgium. Income from a self-employment activity is, in principle, only taxable in Belgium if it is obtained by means of a Belgian establishment or results from business carried on in Belgium.
For Belgian source income, the non-resident tax is levied according to the same rules and (high) rates as the normal taxation of Belgian residents. There are, however, some exceptions to this rule.
If a non-resident has a dwelling available in Belgium or receives 75 percent or more of his worldwide professional income from a Belgian source, he will be entitled to the same personal deductions and tax allowances as any other Belgian resident. If not, the deductions are disregarded or limited.
Special non-resident category: foreign executives
Foreigners working in Belgium may be granted a special tax status, allowing them to be taxed as non-residents on certain types of income (cf. Circular Ci.RH.624/325.294, dd. August 8th, 1983). Foreign executives, directors, specialists and researchers assigned or recruited to work temporarily in Belgium are allowed, under certain conditions, to exclude part of their income from Belgian income taxes and to benefit from certain tax allowances.
One of the main differences from ‘normal' non-resident taxpayers is that the foreign executive will not be qualified as a resident taxpayer in case his wife and children move with him to Belgium.
To get the special status, the foreigner needs to file an application and provide supporting evidence within a period of six months from the employee's start date in Belgium. For example, if you arrive in Belgium on 12 May and start working with your Belgian employer on 1 June, the application should be filed before the end of November of that year.
An application after the six-month period is still accepted if the resident foreigner can prove that the lateness of his request is due to exceptional circumstances. If there are no such circumstances, the benefit of the special tax status will only be granted for the following tax year.
In any case, if you plan to come to work in Belgium or you just arrived and are still settling in, make sure not to forget to contact a tax advisor and verify whether or not you are eligible for the special status. It would be unwise not to apply for the special status if you meet all the conditions.
If you fail to make an application and instead file a normal ‘resident' tax return, the tax authorities are of the opinion that the special status can then no longer be granted as you are presumed to have your tax residency in Belgium.
For more information on the special tax regime for foreign executives, you can have a look at Taxpatria's summary on the subject.
Gregory Goossens / Expatica
Gregory Goossens is an attorney at Taxpatria, an independent service provider for the international community working and living in Belgium. Taxpatria is an alternative to the classic Big Four companies, and its aim is to establish a personal relationship with each client. On their website you can find a list of possible business-related expenses. Feel free to contact them for any related questions you have or see their example of a Belgian tax return in English. Updated 2016.
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