Belgium, which sits at the crossroads of unified Europe, has its share of complex regulations and taxes. We keep you up-to-date.

Belgium is a small country in north-western Europe. Its capital, Brussels, as the home of the European Union and the North Atlantic Treaty Organisation (Nato), has become the official crossroads of Europe .

• Visas 
• Residency permits 
• Work permits 
• Social security 
• Taxes in Belgium 
• Relevant news/legislation 
• Other news

VISAS

EU citizens require only an official identity card to enter Belgium. Those from Australia, Canada, New Zealand, Japan, the USA and many other countries will need a valid passport.

According to Belgian law and that of other EU countries except for the UK, everyone must carry some form of official identification at all times. The law states that this must be displayed upon request to any Belgian police official.

RESIDENCE PERMITS

EU citizens

An EU citizen must register at the commune and complete the paper “request to stay in Belgium”. The individual is then officially registered and issued a temporary registration paper.

Documents needed for registration:

• Valid passport (or national identity card if your member state uses them)
• Visa (if you are from outside the EU)
• Four colour passport photographs
• Birth certificates (originals) of the whole family.
• Marriage/divorce certificates which must be rendered official documentation by a notary, or “legalised” by being translated via a certified translator.
• Rental contract (on headed paper).
• Spouses of divorced parents must have the permission of either the other parent / guardian or the court. This document must also be 'legalised'.
• Certificate of employment or official proof of sufficient means to support yourself.

Non-EU citizens

Non-EU citizens must first apply for a work permit before you they can apply for a residence visa. All this must be done in the individual's home country before leaving.

All the documents listed above are required, and registration must take place within eight days with the police at the commune where the individual is living (temporarily or not).

Next step

After registering in the Aliens register, individuals have two weeks to apply for a residence card (verblijfskaart/permis de séjour).

Again, you need most of the above mentioned papers. Children under 12 will receive a name card to wear around their necks. Those between 12 and 15 may select either the residence card or the name card.

If an individual changes their address, again, this must be reported at their commune in order to acquire a new residence card, which must be renewed before expiration.

WORK PERMITS

EU nationals do not require work permits in Belgium.

Citizens from outside the EU must apply to the Belgian Embassy for a work permit (werkvergunning/permis de travail). They may be asked for:

• A certificate of good health
• A birth certificate with apostille - certified by one of the officials in the jurisdiction in which the document has been executed
• An employment contract
• A marriage/divorce certificate
• Certificates to confirm good character (ie, no criminal record, etc).

Non-EU citizens may apply for one of the three following work permits:

• Type A - this is a relatively flexible permit and therefore possibly best suited for a country-hopping expatriate who is to stay indefinitely.
• Type B - only valid when one employer employs the individual. This employer must be officially authorised to employ the worker in advance. This type of permit tends to be granted for expatriate managers. It must be renewed annually.
• Type C - is the most rare of the three permits. It allows for the employee to have multiple employers or to change employers during the year without having to apply for a new work permit. It is also valid for one year only (renewable).

SOCIAL SECURITY

Individuals who pay into Belgium's social security system will have full health coverage, including sickness, disability, treatment in hospitals, dentistry and general and specialized health care, as well as a pension fund and unemployment allowance.

Belgium has entered multi-lateral agreements with the EU regarding social security payments. These mainly cover salaried persons, self-employed persons, civil servants, students, nationals of an EU member state, or refugees and the stateless, and to the members of their families.

Belgium has bi-lateral treaties regarding social security payments with Algeria, Canada, Chile, Congo, Israel, the former states of Yugoslavia, Morocco, Poland, San Marino, Switzerland, Tunisia, Turkey and the US.

US and Canadian citizens who move to Belgium on a temporary basis (for no more than five years) are allowed to stay within the US or Canadian social security system, in which case no social security must be paid in Belgium.

They also can choose to join the Belgian social security system for the period covering their stay in Belgium, in which case they will obtain all benefits of the Belgian social security system, including, without limitation, general health care coverage.

For more information on social security benefits see http://socialsecurity.fgov.be/allaboutsocialsecurity/allyouwa2001_uk.pdf

TAXES

Belgium is located in Western Europe, bordering the North Sea, between France and the Netherlands GOVERNMENT: Federal parliamentary democracy under a constitutional monarch CAPITAL: Brussels POPULATION: 10,348,276 (July 2004 estimate). Ethnic groups: Fleming 58 percent, Walloon 31 percent, mixed or other 11 percent. ECONOMY: This modern private enterprise economy has capitalized on its central geographic location, highly developed transport network, and diversified industrial and commercial base. Industry is concentrated mainly in the populous Flemish area in the north, although the government is encouraging investment in the southern region of Wallonia. Economic growth in 2001-03 dropped sharply because of the global economic slowdown. Prospects for 2005 again depend largely on recovery in the EU and the US. KEY TRADING PARTNERS:Roughly three-quarters of Belgium's trade is with other EU countries. Export partners: Germany 19.5 percent, France 17.4 percent, Netherlands 11.7 percent UK 9 percent, US 6.7 percent, Italy 5.4 percent (2003). Import partners: Germany 17.7 percent, Netherlands 16.5 percent, France 13.2 percent, UK 7.5 percent, US 5.9 percent, Ireland 5.7 percent (2003) LANGUAGES: Dutch 58 percent, French 32 percent, German 10 percent, legally bilingual (Dutch and French). Source: CIA World Factbook

Income taxes

The Belgian tax year for personal income tax runs from 1 January until 31 December. In April, the individual will be sent a tax return form (aangifte/déclaration) concerning the previous year’s income.

This must be returned usually by the end of June, (the exact date is printed on the tax return). If the individual has not received this form, they must request one from the Ministry of Finance before 1 June.

The local commune will have the address of this ministry if it is not based within the commune itself.

A few months later the individual will receive an assessment notice 'aanslagbiljet/avertissement-extrait de rôle' which says whether the individual is eligible or not for a tax rebate.

Even those who are eligible may have to wait at least a few months to receive it. Individuals can pay their taxes through a pre-printed overschrijving/virement, which is attached to the aanslagbiljet/avertissement-extrait de rôle.

Those with complaints about their tax assessment may submit a detailed complaint, although this does not guarantee that it will have the desired effect, and is likely to prove a lengthy and time-consuming process that will result in more form-filling.

General types of taxes

As you might expect for the country whose capital is also the nerve-centre EU administration - tax bureaucracy in Belgium is massively complicated.

A concise (and severely condensed) insight into the various Belgian taxes includes:

MAIN TAXES

• VAT: Value-added tax in Belgium is set at 21 percent but excludes basic goods such as food, medicine and public transport, which are taxed at 6 percent VAT.

• Personal income tax: withheld by the employer from the salary. Can include donations for charity, childcare expenses for children under three and mortgage interest paid. The witholding tax is only a prefinancing of the final tax and will result in a tax due or tax refund via the assessment note.

  People officially residing in Belgium are taxed on their worldwide income. Non-residents are only taxable on Belgian source income.

  Individual income tax rate varies according to the net taxable income (from 0 percent to 50 percent).

• Local taxes (communal taxes) are included in the aanslagbiljet/avertissement-extrait de rôle. They are paid together with income taxes and not separately, which means provided the individual has paid the aanslagbiljet/avertissement-extrait de rôle, they need not worry about having to pay these.

• Property tax: This tax is based on the annual rental value, which the property owner then pays.

MINOR TAXES

• Road tax (verkeersbelasting/taxe de circulation): This tax, paid yearly, is calculated after an assessment of the car’s horsepower and engine size.

• Car registration tax (belasting op inverkeerstelling/taxe de mise en circulation). This tax is paid when registering a new or used car.

• Car radio tax: This tax is paid yearly, and proof of payment should be kept in your vehicle. According to Belgian law, police even have the right to demand this on the spot.

• Television usage tax: TV tax must in principal be paid yearly to the national broadcasting authorities - Dienst Kijk- en Luistergeld/Radio Television Redevances. in the Flemish and the Brussels region the TV tax is reduced to 0.

RELEVANT NEWS/LEGISLATION

In the Belgian region of Flanders, registration fees have been slashed as part of a new employee profit-sharing scheme.

Regional authorities are empowered to impose registration duties on conveyances of property for valuable consideration.

Flanders, the Flemish region of Brussels, reduced certain tax rates.

Now the local tax rate on property conveyances has been reduced from 12.5 to 10 percent, and from 6 to 5 percent for small dwellings.

The new policy not only reduces local tax, but also can end up lowering the fiscal cost of buying a home.

According to this decree:

For individuals and legal entities:

• The new law will reduce the former registration duties to 10 percent (5 percent for small eligible dwellings for individuals only);

For individuals:

• It will give them the chance to claim the reimbursement or the deduction, as the case may be, of registration duties (with a maximum of EUR 12,500 or EUR 25,000 for married persons) paid on the former residence.

  However, this is only provided it is sold within maximum two years after the purchase of the new principal residence and provided they establish their principal residence there, within two years after the acquisition of the property (the meeneembaarheid).

• It will also provide the exemption of registration duties on the first bracket of EUR 12,500 for the purchase of the individual’s first-ever principal property.

  In the Brussels region there is also an exemption of registration duties for the first bracket of EUR 45,000 for the purchase of a dwelling provided the buyer establishes his principal residence there. Under certain conditions the limit of EUR 45,000 is increased to EUR 60,000.

OTHER NEWS

Stock options are still taxed at grant. A plan designed to promote stock option plans in Belgium may end up endangering their success.

Under the Act of 26 March 1999, stock options granted as of 1 January 1999 are taxed up-front. However, the immediate tax charge on stock options, with no certainty that any gain will be realised later on, could thus prompt employees to refuse them.

A new law on supplementary pensions will come into force on 1 January 2004. The new law will significantly change the supplementary landscape in Belgium. An important measure is that individual pension promises for employees will, under the new law, have to be funded externally and no longer internally within the company. Also, reduced tax rates are only available for payments as of the age of 60.

This information was originally compiled by Rob Hyde in March 2002 and updated by Elise Krentzel in December 2003 in cooperation with Loyens in Brussels.