There are a number of expat tax incentives in Belgium, depending on whether they are considered Belgian residents or not. This guide gives a quick overview.
How much tax you’ll pay in Belgium depends on whether you can qualify for a special tax status reserved for high-ranking expat workers. This guide on expat tax incentives in Belgium includes advice on the following:
- How Belgian residency affects your tax status
- Who qualifies as a non-resident taxpayer?
- Tax as a non-resident
- Expat tax incentives in Belgium
- The benefits of special expat tax status
Finding your way around the many tax codes, exemptions and deductions available can be a challenge for foreigners who need to file in Belgium, especially as most information is only available in French, Dutch or German. To assist you, Taxpatria provides expat-focused financial services, including an updated (unofficial) English version of the tax return.
How Belgian residency affects your tax status
The Belgian tax system distinguishes between resident and non-resident taxpayers when it comes to determining how much income tax you’ll need to pay.
You’ll usually be classified as a tax resident if your family home and main source of income are both in Belgium.
Workers classified as Belgian residents for tax purposes are taxed on worldwide income. This means that they must pay income tax on earnings anywhere in the world. Non-residents, meanwhile, are only taxed on income earned in Belgium.
Who qualifies as a non-resident taxpayer?
Expat workers are usually considered tax residents once they’ve registered for tax and are on the local population register. To be classified as a non-resident taxpayer, you will need to prove your home and main source of income are in a different country.
This could be the case if you’re looking to work in Belgium for a fixed period and your spouse lives abroad. If you’ve moved to Belgium and your partner and children live with you, however, you’re highly unlikely to be able to claim non-residency.
The following types of foreign worker automatically classify 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
Tax as a non-resident
If you earn money in Belgium but are classified as a non-resident, you’ll only pay Belgian income tax on earnings from Belgian employers or if you spend more than 183 days a year in Belgium. Self-employed income only qualifies for tax if the source of that income is a Belgian employer.
Non-residents with properties in Belgium and those who receive 75% or more of their total worldwide income in Belgium can qualify for the same deductions and tax allowances as Belgian residents.
Expat tax incentives in Belgium
Some foreigners are eligible for an expat tax incentive in Belgium, which allows them to qualify as non-resident rather than resident taxpayer.
The special status is open to foreign executives, directors, specialists and researchers recruited to work temporarily in Belgium.
It allows qualifying workers to exclude part of their income from Belgian income taxes and to benefit from tax allowances.
Who can apply for special tax status?
The special status only applies to foreign executives, specialised staff or research staff. Those eligible must prove that they perform activities that require a special knowledge and responsibility.
To gain the special status, you must fit the following criteria:
- Your work in Belgium must be temporary;
- You must work in a specialized research center or for an international company;
- Your main residence and primary financial interests (such as bank accounts etc) must remain in your home country
How to apply for special tax status
To obtain the special status, you must file an application within six months of starting your job in Belgium. For example, if you arrive in Belgium on 12 May and start working on 1 June, you must file the application before the end of November.
If you’re planning on working in Belgium, it makes sense to contact a tax adviser to verify whether you may qualify for special status.
The benefits of special expat tax status
You can attribute some costs to the employer rather than the employee for tax purposes.
You can split costs between ‘one time’ and ‘ongoing’ expenses. One-time expenses include the cost of establishing a home and any losses incurred as a result of moving to Belgium.
Ongoing expenses include the cost of living and housing allowances (such as a moving allowance, settling-in allowance and home visit allowance). They also include the likes of school fees for your children, any tax equalization costs and costs incurred for emergency trips.
One time expenses are unlimited, whereas ongoing expenses are capped at €11,250 (or €29,750 for expats working in a research laboratory or co-ordination center).
One of the biggest benefits of the special tax status is that you can effectively gain non-resident status. Because of this, you only pay income tax on money you’ve earned in Belgium.
For those who travel for work, this can make a significant difference. This is because you won’t need to declare any income you earn on days spent outside of Belgium for income tax purposes.
Real estate income (for example from letting out a house) will only be subject to taxation if the income is derived from property in Belgium.
Foreign investment income
Executives are not usually taxed on foreign investment income unless it comes from a Belgian source. However, dividends and interest in Belgium are generally subject to a withholding tax rate of 30%.
Tax help for overseas expats
American expats in Belgium with tax filing obligations in the US can benefit from help from Taxes For Expats. This is a resource providing support and guidance on submitting annual US tax returns from overseas.
- Belgian Ministry of Finance (Service Public Fédéral Finances)
- Instituut van de Accountants en de Blastingconsulenten (Find an accountant – French or Dutch only)
Gregory Goossens, founder of Taxpatria, obtained his Law Degree in 2004 and graduated in 2005 with a Master’s degree in Tax Law (University of Antwerp). After a brief career as a tax advisor with a Big Four company, he moved to the legal profession in September 2006. A member of the Brussels Bar as well as the Antwerp Bar, his main focus has been on increasingly important global mobility, but he also specialises in the prevention and resolution of tax disputes. He is a native Dutch speaker but is also fluent in English and French.Explore tax breaks in English