Sunday 5 July 2009
Sunday 5 July 2009
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From tax rates through to special expat status, here is Expatica's updated guide to the Belgian taxation system.Expatriates and Belgian citizens alike within the system suffer from one of the highest taxation rates in the EU.
In 2006, the Organisation for Economic Co-operation and Development revealed that Belgium has the highest tax burden - including social security - in Europe at 55.4% for a single earner. This compares to an average 42% in Europe. An expatriate working in Belgium will typically be liable to Belgian income tax. Additionally, property tax, gift and succession duty may be relevant. For most circumstances there is no capital gains taxes or wealth tax for individuals in Belgium, thus pushing the 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 2008 is 6,040 EUR regardless of marital status with further exemptions for dependent children and a spouse. For 2008 marginal income tax starts at 25%, moves to 30% at over 7,420 EUR, 40% over 10,510 EUR, 45% over 17,610 EUR with a top limit of 50% for incomes above 32,270 EUR.
Residents also pay communal and regional taxes at rates between 0% and 8.5% of the total income tax payable. The most common rate is 6%.
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 supporting documentation or more usually on a lump sum basis depending on salary. The 2008 rate for this standard professional deduction is a maximum 3,320 EUR.
The Belgian tax year for personal income tax begins on 1 January and ends 31 December. You will typically receive a tax return (declaration/aangifte) during May relating to the previous year’s income. This must be returned by mid July (you will find the exact date on your tax return). If you don’t receive a return, request one from the Ministry of Finance before 1 June or risk a penalty! 
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