Discover how taxes in Belgium work, including information on tax rates and federal taxes on income, companies, and inheritance.
As an expat moving to Belgium, it can be helpful to get your head around the various taxation measures in your new country, from income tax rates to how corporate tax and VAT work. Read on for an overview on the following:
- The tax system in Belgium
- Federal taxes in Belgium
- Local taxes in Belgium
- Taxes on goods and services (VAT)
- Who has to pay tax in Belgium?
- Belgian tax system for foreigners
- Income tax in Belgium
- Tax on property and wealth in Belgium
- Inheritance tax in Belgium
- Company taxes and VAT rates in Belgium
- Tax rebates and reliefs in Belgium
- Tax avoidance and evasion in Belgium
- Tax advice in Belgium
- Useful resources
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The tax system in Belgium
Tax rates in Belgium are some of the highest in Europe. For example, the rate of personal income tax can reach 50% for the highest earners, well in excess of many European countries.
If you are a foreigner working in Belgium, you are generally liable to pay Belgian taxes and file a tax return. Property owners may also find themselves liable for the likes of property tax, gift tax, and inheritance tax. However, if you’re earning money from a source outside Belgium, you almost certainly won’t need to worry about double taxation. There are over 150 agreements in place with other countries to prevent residents from having to pay additional income tax in their home country.
Federal taxes in Belgium
Some Belgian taxes are collected and charged at regional level, while others are managed by individual municipalities. Income tax, VAT, and corporate tax in Belgium are subject to the same rules across the country. The national government generally collects tax revenues.
Other taxes vary significantly depending on where you live in Belgium. For example, inheritance tax rates differ in Brussels, Flanders, and Wallonia.
Local taxes in Belgium
Municipal taxes on utilities including TV, trash collection, and water are levied by the relevant regions, provinces, and municipalities (communes/gemeenten) at rates of up to 9%. This is part of your income tax.
The exact amount you’ll need to pay is set at a local level. For example, each of the 19 municipalities in Brussels sets its own rate. Non-residents don’t pay municipal tax. Instead, they pay a federal tax at a flat rate of 7%.
Taxes on goods and services (VAT)
In Belgium, VAT is called Taxe sur la Valeur Ajoutée (TVA) or Belasting over de Toegevoegde Waarde (BTW). This applies to most goods and services.
The standard rate is 21%, but there are lower rates for some categories of goods and services. A rate of 12% is applied to food served in restaurants and social housing, while a rate of 6% applies to most basic goods, such as food, water supply, books, and medicine. A 0% rate is available on some daily and weekly publications and recycled goods.
Can you get a refund on BTW/TVA?
If you’re selling goods to another VAT-registered business elsewhere in the EU, the customer pays VAT at their own country’s rate. This also works the other way around, so if you buy goods from another country within the EU, you’ll pay VAT at Belgian rates. When making a cross-border transaction, you will need the customer’s VAT number. You can check this through the European Commission.
Who has to pay tax in Belgium?
How much you’ll need to pay in Belgium depends on whether you’re a resident or non-resident. If you live in Belgium for at least six months (183 days) of the year and are registered with your local commune, then you are a resident for tax purposes. As a result, you must pay Belgian income tax on your worldwide income.
Your taxable income is the income left after deductions for the likes of social security contributions, personal allowance, and professional costs.
Belgian tax system for foreigners
If you live in Belgium for fewer than six months (183 days) per year, you are only taxed on income you’ve earned in the country, including rents and capital gains.
Expatriates working in Belgium temporarily may be able to apply for a special taxation regime and only pay Belgian income tax on their income in Belgium (rather than their worldwide income), even if they’re classified as a Belgian resident. Find out more about filing your taxes in Belgium.
Expatriate tax regime for executives and specialists
In 2022, a new expatriate tax regime for executives and specialists was introduced. This system applies to employees and directors recruited abroad or posted to Belgium, for whom 30% of their income is exempt from tax, up to an amount of €90,000. Their income must be over €75,000, unless they qualify as a researcher, and the regime can be used for five years (with the possibility to extend it to eight years).
The aim of this tax regime is to provide a more transparent system and to simplify hiring foreign executives. There are several other criteria that must be met to qualify for the regime, which you can read about in our article about filing your income tax.
Income tax in Belgium
Residents of Belgium pay personal income tax on their total earnings from all worldwide sources on a sliding scale. The tax brackets for 2022 and 2023 are as follows:
Income tax bands for the 2022 tax year
|Belgian income tax bands||Belgian tax rate|
|Up to €13,870||25%|
Income tax bands for the 2023 tax year
|Belgian income tax bands||Belgian tax rate|
|Up to €15,200||25%|
Your income is determined by your salary minus any compulsory social security contributions (paid either in Belgium or abroad). Everyone is entitled to a personal tax-free allowance (belastingvrije som, somme exonérée). This stands at €9,270 in 2023 (applying to earnings from 2022) and will rise to €10,160 in 2024 (applying to earnings from 2023). Your tax-free allowance increases if you have children.
If your income is under the tax-free allowance, you’ll be eligible for a tax refund. The Belgian government has advice on how to do this, but if you want to save time and energy, you could use a service like Taxback. This way, the experts handle the process and paperwork for you and make sure you get the maximum amount back.
Professional expenses can also be deducted on an actual cost basis by providing supporting documentation, or on a lump-sum basis. You can read more about this on the Belgian Finance Ministry’s website.
How to file your income tax return in Belgium
The Belgian tax year runs from 1 January to 31 December. All residents of Belgium and non-residents taxed on Belgian-sourced income have to file an annual return. You generally receive a tax return around May or June (déclaration/aangifte), relating to the previous year’s income. Paper tax returns must be returned by the end of June.
You can usually have until mid-July to file your return if you use the MyMinfin online filing system. Residents filing ‘complex’ tax returns can get an extension until mid-October. Non-residents file their returns at the end of September or the beginning of October.
If you don’t submit your return by the deadline you can face a fine, and the tax authorities may estimate how much tax you need to pay. You can track the progress of your tax return through MyMinfin.
Self-employed income tax in Belgium
Self-employed people pay the same rates of income tax as employed workers in Belgium.
To pay tax, self-employed workers and freelancers must register with the tax office and, if necessary, the VAT office. This is possible through a one-stop-shop or business counter (guichet d’entreprise in French, ondernemingsloket in Dutch).
There are offices throughout Belgium. You can find the nearest office on the FPS portal. You will need to keep accounts, receipts, and make declarations of income. Naturally, you will also need to pay your bills on time.
Tax on property and wealth in Belgium
Property owners must pay an annual tax, based on ownership as of 1 January each year. The amount is calculated on the presumed annual rental value (revenue cadastral/kadastraal inkomen) that is attributed to the property by local authorities.
The tax paid varies according to the commune and the region. If you live in the Flemish region, it is generally 2.5% of the annual rental income; in the Brussels-Capital Region, it is 2.25%; and in the Walloon region, it is approximately 1.25%.
Tax exemption on property purchases
When you buy a property in Belgium, you’ll need to pay a transfer tax (otherwise known as registration tax) to move the title of the property in your name.
How much you’ll pay varies from around 6%–12.5% of the purchase price, depending on where in Belgium you’re buying the property. In Brussels, you can benefit from a tax-free exemption (abattement) on the first €200,000 (increased from €175,000 in 2023) of the property’s price. A smaller abattement of €20,000 is available in Wallonia. Properties less than two years old are subject to VAT rather than transfer tax.
Inheritance tax in Belgium
Inheritance tax applies to the total value of the estate of a person settled in Belgium, or any property owned in Belgium if they are not settled there. How much tax you’ll pay varies from region to region. It is paid to the region in which the deceased was a tax resident for the majority of the last five years of their life.
Belgium has a three-year rule for gifting movable and immovable property. This means that if you give something to an heir and then die within three years, they’ll then need to pay inheritance tax on the value of the gift. As with inheritance tax, gift tax rates vary depending on where in Belgium the deceased resided and their relationship with the beneficiary.
Company taxes and VAT rates in Belgium
The basic rate of corporate tax in Belgium in 2023 is 25%. Before 2021, companies were required to pay 29% plus a 2% crisis tax. For companies with profits of less than €100,000, the rate is 20%.
Tax rebates and reliefs in Belgium
In an addition to the standard tax-free allowance, individual taxpayers in Belgium can deduct up to €5,520 for employment-related expenses when filing their tax return. They can also take advantage of reliefs for other expenditures, such as charity donations, mortgage payments, pension and life insurance contributions, and childcare expenses. You can find out more about individual deductions in the guide from PwC.
Tax avoidance and evasion in Belgium
Belgian authorities are increasingly attempting to crack down on tax evasion. In 2023, new powers were introduced to allow the tax authority to better investigate tax fraud. These include a four-year tax assessment period if a return is filed late or not at all, and a new rule requiring digital platforms to report information to the tax authorities.
If you fail to submit your tax return on time or pay an outstanding tax bill, you’ll be subject to a penalty. How much you’ll need to pay depends on how late the return or payment is, and whether you’re deemed to be deliberately avoiding tax. Fines for late submissions range from €50 to €1,250, alongside a tax surcharge of between 10% and 200% of the amount owed.
Tax fines also exist for companies which fail to file returns or pay their taxes. Again, surcharges of up to 200% are possible, as are additional legal sanctions. How much companies are fined may vary depending on their turnover, number of employees and sector.
Tax advice in Belgium
Doing your taxes in Belgium can be a complex matter. The information given here provides a general overview, but you should always get professional advice from a Belgian financial expert regarding your individual tax situation.
The Ministry of Finance (Service Public Fédéral Finances) provides information on all aspects of taxation, most of which is available in Dutch and French, or you can call +32 (0)2 572 5757 (8:00 to 17:00).
You can find an accounting expert (expert-comptable/compte fiscal/accountant/belastingconsulent) through the website of the Institute for Tax Advisors & Accountants.