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Taxes in Belgium

2nd February 2014, Comments10 comments

Taxes in Belgium
From tax rates through to special expat tax status, here is Expatica's updated guide to the Belgian taxation system.

Expatriates and Belgian citizens alike suffer from one of the highest taxation rates in the EU. It amounts to an effective tax rate (including social security) of well over 50 percent for the highest earners. This compares to an average 45 percent in Europe. An expatriate working in Belgium will typically be liable for Belgian income tax. Additionally, property tax, gift and inheritance tax may be relevant. In most circumstances there are no capital gains taxes or wealth tax for individuals in Belgium, thus pushing the tax burden firmly onto the employee.

Residents of Belgium pay personal income tax on their total income from all worldwide sources on a sliding scale. The basic exemption for fiscal year 2014 (revenue of 2013) is EUR 7,070 regardless of marital status, with further exemptions for dependent children and a spouse. For 2013, marginal income tax starts at 25 percent, rising to 30 percent for income over EUR 8,590, 40 percent over EUR 12,220, 45 percent over EUR 20,370, with a top limit of 50 percent for incomes above EUR 37,330. Residents also pay municipal and regional taxes and municipal taxes typically range between 0 and 8 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 height of the salary.

The Belgian tax year for personal income tax begins on 1 January and ends on 31 December. You will typically receive a tax return (déclaration/aangifte) during May relating to the previous year’s income. This must normally be returned by the end of June (you will find the exact date on your tax return). If you use the ‘Tax-on-Web’ online filing system, you are traditionally allowed a couple days extra. Employers are responsible for withholding tax on a monthly basis – this is known as the Précompte Professionnel/Bedrijfsvoorheffing. Similarly, the self-employed or paid company directors have to pay tax monthly in advance via a collecting agency or bank.

Other Belgian taxes

Homeowners pay a local property tax (précompte immobilier/onroerende voor heffing), which is calculated on the presumed annual rental value attributed by the authorities to the property (revenue cadastral/kadastraal inkomen). 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.

Special expatriate tax status

Expatriates who satisfy specific conditions come under a special taxation regime and pay Belgian tax only on income related to professional duties carried out in Belgium. A foreign executive assigned temporarily to Belgium may qualify, but the conditions are tough. Employment must be by an international group or in a scientific research centre, and must be temporary. 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; or continuing to act as an officer of a foreign company. If you qualify for the above, there are specific allowances and deductions available.

VAT in Belgium

Most goods and services have VAT levied on them. The standard rate is 21 percent while there are lower rates for certain categories of goods and services. Daily and weekly publications and some recycled goods attract a zero rate, while a 6 percent rate applies to most basic goods, such as food, water supply, books and medicines. Another rate of 12 percent is applied to social housing and food served at restaurants.

To find your local tax office, please check your annual income tax return or go to annuaire.fiscus.fgov.be for more information.

SPF Finance ministry

Service Public Fédéral Finances/Federale
Ministère des Finances/Ministerie van Financien

02 572 5757 (Contact centre) | 8am to 5pm | www.minfin.fgov.be

 


Expatica / Upated in cooperation with TAXPATRIA.

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10 comments on this article Add a comment

  • 14th September 2013, 17:20:53 Lukeyluke posted:
    My wife is from Belgium, the only reason i live here.
    50% is the limit for me, however at Xmas I got a 3,000 bonus, after tax deductions i took home about 750 euros. I flet sick, i could not believe how much the goverment took form me. My company had to pay about 5,000 for me to get paid 3,000 and then they took again to leave me with 750....... Hahaha
    Everything in Belgium costs more than anywhere else in the EU, cars, taxes on cars, car insureance, TV, internet, phones, food. Buying a house, you pay 15 plus % in taxes up front. Health care, you pay upfront and claim 20% back, doctors, hospitals Crazzy place.

    If you work for a company, you have no chance of saving, every little euro you make, some one has a reason to take it off you.

    Now, when you come here, you will see a LOT of big nice new cars, houses these people own thire companies and almost all do trads in black. The goverment take so much anyone and everyone who can, will do what they can to avoide paying taxes because of the groverment wanting more than you.

    I have never seen so many expats leave because of the taxes.
  • 15th February 2014, 11:35:42 Mari posted:
    When you work hard and get awarded it's and award and recognition more for the government than yourself! It's not normal that anything gets taxed more than 50%. And at the same time all unemployed immigrants receive an unemployment package of 1000 eur while I work my ass off every single day and and get just a little more
  • 25th February 2014, 12:52:29 chacha posted:
    [Edited by moderator. Please direct expert questions to our 'Ask the Expert' service www.expatica.com/ask_the_expert]
  • 1st March 2014, 22:07:56 alex posted:
    Belgium has the highest tax rate on salary in the World, while its public services are average to poor compared to other EU countries. If you are a super-rich, however, not living on your salary, this country is considered as a tax-heaven. In other words, this is a total rip-off. I got the hell out of there, albeit belgian, and strongly intend not to come back. Ever.
  • 7th May 2014, 19:26:29 Li posted:
    Someone I know who has been unemployed for years bought a place in Turkey based on the unemployment package.
  • 18th May 2014, 11:39:02 andrew posted:
    The Belgian taxation system belongs to 200 years ago. For those idiots (like me) who are entrepreneurs, trying to build a business in 2014, you just get shot down by punitive taxes. One piece of advice I have been given in Belgium, is if you wish to pay less tax then you should aim to earn less. Astonishing logic!
  • 24th May 2014, 07:14:33 Mr Mason Clark posted:
    My name is Mr Mason Clark i am a private lender who give out loan to private individuals. Have you been turned down by so many banks? Do you need finance to establish your business? Do you need finance for the expansion of you business? Or do you need a personal loan? My interest rate 2% is very affordable and our loan process is very fast as well. I am very willing to make all your financial troubles . If you are really ready to get your financial problems solved, Then search no further and apply for a loan today. If you are interested you can contact us today via email: masonclarkloanfirm@outlook.com

    Best regards.
    Mr Mason Clark
    Managing Director.
    Mason Clark Loan Firm Plc.
  • 24th May 2014, 07:14:33 Mr Mason Clark posted:
    My name is Mr Mason Clark i am a private lender who give out loan to private individuals. Have you been turned down by so many banks? Do you need finance to establish your business? Do you need finance for the expansion of you business? Or do you need a personal loan? My interest rate 2% is very affordable and our loan process is very fast as well. I am very willing to make all your financial troubles . If you are really ready to get your financial problems solved, Then search no further and apply for a loan today. If you are interested you can contact us today via email: masonclarkloanfirm@outlook.com

    Best regards.
    Mr Mason Clark
    Managing Director.
    Mason Clark Loan Firm Plc.
  • 5th June 2014, 14:31:40 Irma Bringas Claeys posted:
    My late husband was the main bread winner in our household, he was Belgian and I am from U.S.A. I left back home 2 running businesses that I managed on a daily basis, just to follow my husband as he couldn't settle in the U.S., Here he was Sales Director IT Financial Software etc; very hard work, many hours and a lot of travelling, he worked extremely hard and when tax time came 64% of NET income was out, practically you could buy a house with the taxes paid yearly. He passed away in 2009, and since then it has been extremely difficult financially. The idea was to get back to the U.S.A. so we didn't buy a house here, so now I can't go back home with my daughter, so high price renting and paying taxes on my very low income.
  • 1st October 2014, 14:26:07 S.H. More posted:
    Realy
 

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