If you work in Belgium as a freelancer, self-employed worker or company owner, you must register to pay Belgian corporate tax and social security. This guide explains self-employed tax in Belgium.
If you work in Belgium as a freelancer or self-employed worker you’ll usually pay income tax on your profits rather than corporate tax. This guide on self-employed tax in Belgium includes advice on the following:
- Self-employed tax system in Belgium
- Self-employed income tax in Belgium
- Registering for taxes in Belgium
- Tax deductions and credits in Belgium
- Corporate tax rates in Belgium
- How to file your taxes in Belgium
- VAT in Belgium for self-employed people
- Social security for self-employed workers in Belgium
- Combining freelance work and paid employment in Belgium
- How to find an accountant or financial adviser in Belgium
Self-employed tax system in Belgium
A 2018 OECD report found that around 13% of workers in Belgium are self-employed – that’s slightly below the overall EU average. 14% of men are self-employed, compared to just 9% of women.
If you reside in Belgium and work on a self-employed or freelance basis or have a stake in a partnership, you’ll need to file a Belgian tax return and pay income tax (impôt des personnes physiques in French, personenbelasting in Dutch). However, if you’re the owner of a larger company then you’ll need to pay corporate tax instead.
In addition to income tax, self-employed workers need to make social security contributions.
Self-employed tax in Belgium
Self-employed workers who live in Belgium for more than six months (183 days) of the year and are registered with their local commune are classed as Belgian residents. This means they must pay Belgian tax on their worldwide taxable income.
Taxable income is the income left after deductions for social security contributions and any relevant professional expenses. If you are married, and your spouse’s income is less than 30% of your joint income, then you can also deduct a dependent spouse allowance.
Workers living in Belgium for less than six months (183 days) who don’t have a Belgian ID card are classed as non-residents. Thus, they are only taxed on their income earned in Belgium.
Registering for tax in Belgium
Once you’re registered with your local commune, you should receive an income tax return on an annual basis. Income tax is payable one year after the end of the Belgium tax year.
Self-employed workers can instead choose to pay advance estimated quarterly payments for the year in progress. However, won’t be required to make advance payments for the first three years of setting up your business.
Self-employed tax deductions and credits in Belgium
Self-employed people can deduct their social security contributions and business expenses when filing a tax return. Expenses can either be deducted on an actual or lump-sum basis.
Any expenses you offset on your tax bill must relate to a professional activity and be declared at their actual cost. While most expenses are deductible at their full cost, car-related expenses (75%), restaurant bills (69%), and representation costs (50%) are only partly-deductible.
If you want to claim your expenses on an actual cost basis, you’ll need to keep track of all of your expenses inc ase you’re required to provide evidence when you file your return.
Alternatively, you can deduct your expenses as a lump sum. Self-employed workers are allowed to offset a fixed amount against their tax return, which is automatically allowed without the need to provide evidence.
It only makes sense to choose the lump sum deduction if your actual expenses are less than the lump sum or you can’t evidence your expenses fully.
For the current tax year, the maximum lump sum deduction is set at €4,530.
Some other expenses can’t be deducted in full in a tax year, and instead must be depreciated over more than one year. The rules around this can be complicated, so take advice on your situation from an accountant.
For example, if you use your own car for business purposes, it can be depreciated over five years. This means that one-fifth of the purchase price of the car is deducted from your tax bill every year.
Corporate tax rates in Belgium
Income tax rates
If you are a sole trader or in a partnership, then your profits are subject to personal income tax. The current rates are charged in progressive bands, up to 50%.
The current income tax bands in Belgium are as follows:
|Belgian income tax bands||Belgian tax rate|
|Up to €13,250||25%|
All workers in Belgium have a personal tax-free allowance before income tax kicks in.
This is currently set at €8,860, with an extra €1,610 if you have one child, €4,150 if you have two children, and €9,290 if you have three children, and €15,030 if you have four children.
Corporate tax rates
If you need to pay corporate tax instead of income tax, the rates are different.
The corporate tax rate in Belgium is 29%, with the addition of a crisis tax of 2% (meaning a total effective rate of 29.58%). However, in 2021 the standard level of corporate tax will reduce to 25%, and the crisis tax will be abolished.
Companies making less than €100,000 in a year can pay corporate tax at a lower rate of 20%.
How to file your taxes in Belgium
The Belgian tax year runs from 1 January to 31 December. You will typically receive a tax return around May or June (déclaration/aangifte), relating to the previous year’s income. This must normally be returned by the end of June, although you will find the exact date on your tax return.
You can file your tax return by post to your local tax office (the address will be on the top of your tax return) or online using an eID through the Belgian government’s tax portal, Taxonweb.
You are usually allowed some extra time if you use the online filing system. Non-residents file their return at the end of September or beginning of October.
If you don’t submit your return by the deadline you can face a fine. In addition to this, the tax authorities may estimate how much tax you need to pay.
You can track the progress of your tax return through the government’s finance application, Minfin.
The filing deadline for 2019 corporate tax returns is currently 30 June 2020, but this could change as deadlines have regularly been postponed in recent years.
Companies typically make their Belgian corporate tax payments in four instalments:
- First quarter: no later than 10 April
- Second quarter: no later than 10 July
- Third quarter: no later than 10 October
- Fourth quarter: no later than 20 December
In the event of a late return, the government can calculate the company’s tax bill automatically. Late payers are also subject to a surcharge, which depends on the company’s previous filing record and its deemed intention to avoid paying tax.
VAT in Belgium for self-employed people
In Belgium, VAT is called Taxe sur la Valeur Ajoutée (TVA) in French or Belasting over de Toegevoegde Waarde (BTW) in Dutch.
If your business is offering goods or services then you may be liable to pay and charge your clients VAT.
If your earnings are less than €15,000 you can opt for petite entreprise/kleine onderneming status, which makes you exempt from VAT but also from claiming it back. Small businesses can claim an exceptional VAT threshold up to €25,000.
VAT is charged at 21% for most items and is paid monthly or quarterly. Some items qualify for lower rates of 12% and 6%, while a handful of items are VAT-free.
VAT can be reclaimed on your professional expenses.
Social security for self-employed workers in Belgium
Self-employed and freelancers generally pay a higher percentage of their income than employees, although the exact amount depends on your age, how long you have been self-employed and how much you earn.
Self-employment social security contributions generally work out to around 22% of your annual income.
You will be sent a bill at the beginning of each quarter (January, April, July, and October) and you have to pay before the end of the quarter.
Contributions are based on your income from three years previously. During your first three years of working as a freelancer, you will be charged a minimum provisional amount and at the end of the three years your contributions will be adjusted.
You can avoid large bills by estimating what your income will be and making payments in advance.
Combining freelance work and paid employment in Belgium
If your freelance work is in addition to paid employment, you can apply for the status of indépendant complémentaire (in French) or zelfstandige in bijberoe (in Dutch).
This means that you can pay social contributions as you earn, but with no minimum. Income tax is calculated by adding freelance income to your salary.
How to find an accountant or financial adviser in Belgium
You can find an accountant (expert-comptable or compte fiscal in French, accountant or belastingconsulent in Dutch) through the website of the Instituut van de Accountants en de Belastingconsulenten (French or Dutch only).
In addition to this, US expats in Belgium can get help with meeting their American tax obligations as a non-resident from Taxes For Expats.
- Federal Public Service Economy SMEs, Self-Employed and Energy: information on self-employment in Belgium, much of which is in English.
- Information on Belgian social security: mainly in French and Dutch, but has an English language contact email service.
- RSVZ: social security authority for self-employment in Belgium.
- VAT section of the FPS Finance website: more information on VAT, in French, Dutch and German.