First aid kit for filing your tax return in 2020.

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First Aid Kit for your 2020 Tax Return Year 2020 Bestaansmiddelen art 133 lid 1 3,330 Bestaansmiddelen alleenstaande 141 4,810 belastingvrije som 131 lid 1 1° Personal allowance 8,860 Childcare 600 Huwelijksquotiënt: marital deduction 10,940 art. 87, lid 2 en art. 88, lid 1 WHT 30% Savings accounts / savings 21 1 5° 980 // dividend 21 1 14° 800 Student job tax free art 143 7° FZ 243 2,780 Deadline paper 30 June online 16 July accountants 22 October non-residents 5 December Securities account 500,000 cheque service max 1,500

… filing taxes in Corona Times

Bd Brand Whitlock 165 B - 1200 Brussel T +32 2 786 36 00 W www.david-law.be BCE 0702.820.428


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Contents Intro .................................................................................................................................. 5 If this is the first time … ........................................................................................................ 7 Tax returns for families ......................................................................................................... 9 Filing jointly or separately? .............................................................................................. 9 You do not pay more tax when you file jointly ............................................................ 9 And the children? ........................................................................................................... 10 When do I need to file? ...................................................................................................... 11 When do I receive my tax return?.................................................................................. 11 It's 1 June and I haven't received my tax return yet ...................................................... 11 We received a tax bill instead of a tax return ................................................................ 12 I am late .......................................................................................................................... 12 Filing on paper or online? ................................................................................................... 13 Why file online? .............................................................................................................. 13 Are there any disadvantages? ........................................................................................ 13 Who cannot file online? ................................................................................................. 14 Filing online ......................................................................................................................... 15 My identity card doesn't have a chip ............................................................................. 15 How does Tax-on-web work? ......................................................................................... 16 Calculate the tax ............................................................................................................. 17 Don't forget to sign ......................................................................................................... 17 The paper tax return........................................................................................................... 19 The tax return ................................................................................................................. 19 The draft ......................................................................................................................... 19 The green page ............................................................................................................... 19 The explanation .............................................................................................................. 20 The envelope .................................................................................................................. 20 Help!?.................................................................................................................................. 21 How difficult is it really? ................................................................................................. 21 Can I get help? ................................................................................................................ 21 Checklist .............................................................................................................................. 23 The tax return in detail ....................................................................................................... 25 I. – Bank account and contact details ............................................................................ 25 II. – Your family situation ................................................................................................ 25 Spouses and registered partners 2020 ...................................................................... 25 Officials of international organisations ...................................................................... 26 Dependents ................................................................................................................ 26 Older children ............................................................................................................. 26 Co-parenting ............................................................................................................... 27 Other dependents ...................................................................................................... 27 Arriving or leaving Belgium in 2019 ........................................................................... 27 III. – Real estate .............................................................................................................. 29 I have a buy-to-let ...................................................................................................... 29 And property abroad? 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IV. – Salary....................................................................................................................... 31 Work outside Belgium ................................................................................................ 31 Unemployed? ............................................................................................................. 33 V – Pensions .................................................................................................................... 34 Cross border taxation ..................................................................................................... 35 Savings and investments .................................................................................................... 37 VII. – Investment income ................................................................................................ 37 Overseas bank accounts ............................................................................................. 38 Bank charges ............................................................................................................... 38 Maintenance ....................................................................................................................... 39 VI. – Alimony and child support...................................................................................... 39 Child support .............................................................................................................. 39 VIII. – Maintenance paid ................................................................................................. 39 Some planning opportunities ..................................................................................... 40 IX. - Mortgages ................................................................................................................ 41 X. - Other tax reductions................................................................................................. 41 XII. – Paying your tax in advance : “Versements anticipés” ........................................... 42 XIII – Overseas bank accounts and insurance ................................................................ 43 Overseas bank accounts ................................................................................................. 43 Why is that? ................................................................................................................ 43 How much is known about my bank accounts? ......................................................... 43 Life insurance .................................................................................................................. 44 Trusts .............................................................................................................................. 44 Cayman tax ................................................................................................................. 44 Securities accounts ......................................................................................................... 44 Capital gains ........................................................................................................................ 45 Stock exchange tax ............................................................................................................. 45 Securities Tax ...................................................................................................................... 46 Nowhere to hide ................................................................................................................. 47 Common Reporting Standard ......................................................................................... 47 The tax bill ........................................................................................................................... 49 Receive the tax bill online ........................................................................................... 49 Check it ....................................................................................................................... 49 And if the tax man made a mistake ............................................................................ 50 Contest the tax bill .............................................................................................................. 51 Do I need an accountant or a lawyer to file an appeal? ................................................ 51 And if I wait too long? ..................................................................................................... 52 Taxes in Corona Times ........................................................................................................ 53

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Intro In these Covid-19 times, many of us are still trying to work from home while educating our children. The government is trying to make life a bit easier with some tax measures (see “Taxes in Corona Times�). Even the tax men and women have been confined at home and non-essential tax audits have been put on hold. However, they had some WFO-experience as the tax administration has been experimenting with teleworking for some years now. This is why the tax returns have already dropped in our letterboxes and we do not get an extension to file our tax returns. 30 June is the deadline for filing paper tax returns.. If you file online, you have another two weeks, until 16 July. Yes, it's tax return time again. Whether you are new to Belgium or have been filing your tax return here for years, you may have several questions. We will address some of these questions and we will address some other questions you didn't know you had. This guide was written by Marc Quaghebeur, an international tax lawyer and partner at Cabinet DAVID. It is a general introduction based on current understanding of the law. It is not to be taken as a suitable alternative for individual advice.

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If this is the first time ‌ If you are new to Belgium, or if this is th e first time you must file a tax return, these are a few of the things you need to know. The first time you receive a tax return, it comes in the form of a brown envelope with a tax return and a form to prepare the tax return guide (see p. 19). You can file a paper tax return or you can file online. Four out of five taxpayers are already filing online, and fewer and fewer people prefer to file paper tax returns dwindling. Please note that once you file online, the tax authorities assume that you will want to do so again, and they will not send you a paper form anymore. In Belgium married couples and registered partners file jointly but they are taxed separately on the same tax bill (see p. 9). In your tax return, you declare your income. You don't report your wealth. If you have overseas bank accounts or insurance policies, all you do is tick a box. You don't have to give any information about those (see p. 43) but that does not mean that the taxman doesn’t have any information at all (see p. 47). You don't have to calculate the tax yourself and you don't have to pay the tax immediately or enclose a cheque. This is because most tax is deducted at source; your employer pays your salary net social security and income tax. And if you receive a pension, tax is already deducted as well. The tax withheld at source will normally cover the tax. However, you still have to declare all your income, and the tax bill will show whether you get any tax back. That may be the case if -

you have a mortgage, you pay a cleaner or helper with titres services / dienstencheques you have made some gifts, you pay alimony or child support, you pay childcare, or you put some money aside for pension saving,

And if you have any savings, the bank deducts the tax "at source"; you don't have to declare the dividends or interest. However, if you have savings with an overseas bank abroad, you must report the income.

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If you file in time, the tax bill will be sent to you a few months later, at the latest on 30 June 2021. You have two months to pay the bill; if the bill shows a reimbursement, that will come two months later as well. If you want to calculate how much tax you will have to pay, you can calculate the tax anonymously on Taxcalc.

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Tax returns for families In Belgium, the tax return is a tax return for the whole family. Parents file jointly and declare their children’s income, unless they had a student job or receive maintenance

Filing jointly or separately? Spouses and registered partners (in Belgium they are called legal cohabitants / wettelijke samenwonenden) don’t get to choose whether they file jointly or separately. Couples who live together but have not registered their partnership file separate tax returns. Filing jointly should not make a lot of difference; the tax is calculated for each separately on their own earnings and unearned income (rent, interest, dividend, etc). That is why the draft tax return has a different column and different codes for the income of each spouse or (registered) partner. The husband puts his information in the column on the left, the wife on the right. The codes are basically the same, starting with 1 for the husband and 2 for the wife or partner. Same sex partners or spouses use the left column for the older partner. Income from investment income that is owned by both spouses must be split in two, that is the case for the cadastral revenue of property that is let out, for interest on joint bank accounts, etc. The tax bill also has two columns, one for each spouse or partner; the income is added up for each, and each has his own personal allowance of €8,860 (for 2019), which results in a tax reduction of €2,215.

You do not pay more tax when you file jointly The tax is calculated for each spouse or partner separately. In fact, when one spouse or partner isn't working, 30% of the other’s income is deducted, and taxed with the stay-athome partner/spouse. That part is then taxed at a lower tax rate. This is called the "marital deduction", and it is limited to €10,940 (in 2019) Even if the tax is calculated separately, the tax bill shows one figure as the tax due or the tax to be reimbursed. The reimbursement will go on the bank account stated in the tax return, and usually that is a joint account. However, if tax is due, who has to pay that tax? You should be able to work out who has to pay how much tax because the tax is calculated in two separate columns. In case of doubt, you can always ask the taxman to tell you exactly how much tax each of you owes him. That makes it easier to settle accounts later with your ex. 9


And the children? Children do not need to file an income tax return: if they have any income, it is added to, and taxed with, their parents’ income. If it is bank interest or dividends, the tax has normally been deducted by the bank, but if it is income on an overseas account, it has to be declared by the parents (see p. 37). A separate tax return must be filed for the children who receive maintenance or if they had a student job as follows. The parents must not declare the maintenance they receive for their children on their tax return. Maintenance is income for the children. Nevertheless, a separate tax return must not be filed for the children if they are under 16, unless they receive more than €11,075 in maintenance. If the children receive more maintenance or if they are over 16, they must file a tax return of their own. Students who have a job will normally not have to file a tax return. If they meet the conditions and have a valid student agreement (check student@work !), the taxman knows how much they earned and he will send them a provisional tax calculation (see p. 12) but only if they earned more than €12,657.14. Not all remuneration is taxable: they are entitled to a 30% standard deduction and the first €8,860 is tax exempt. The situation is different when the student also receives maintenance; 80% of the maintenance is taxable on top of the net remuneration from the student job. If they receive a simplified tax return, they have to correct that before 30 June and declare the maintenance. If they did not receive one, they have to file a tax return and declare the gross remuneration (see p. 31) and the full maintenance (39). Children who receive more than €3,330 in maintenance or personal financial means are not dependents anymore (see p. 26). If they live with a single parent, the threshold is €4,810. The first €2,780 from a student job is disregarded, so that a student can earn up to €8,133.9 before she loses her status as a dependent (€9,984 for a single parent).

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When do I need to file? The tax return on paper must be filed by 30 June. This means the tax return must hit the letterbox of the scanning centre in Jambes (near Namur) or in Ledeberg (near Ghent). on that day. Don't leave it to the last minute. Putting the tax return in the mail on the 30h may be too late. If you forgot the deadline, you can file online until 16 July. Plan ahead; Tax-On-Web tends to get overloaded. Based on past experience, the tax office gives a forecast of the busy days. If you are too late, you can always give a power of attorney to an accountant or a tax adviser (that is done online at the latest on 31 August). He can then file online until 22 October. However, on behalf of all accountants and tax advisers, please do not bring your shoebox with your payslips and tax documents on the 20th of October. If you aren't living in Belgium, or if you have the expatriate tax status, the paper filing deadline for non-residents is much later, usually in the beginning of November (on paper) or, if you or your tax adviser file online, a few weeks later.

When do I receive my tax return? The tax authorities must send your tax return to you five weeks before the deadline. They are being sent out between 7 and 24 May. Tax-On-Web can be accessed from 8 May. Nonresidents will only be able to access Tax-On-Web from the middle of September.

It's 1 June and I haven't received my tax return yet If you filed your tax return online last year, that is normal. Once you file online, the tax authorities assume that you want to continue filing online and they do not send you a paper tax return anymore. In the past you could ask to receive a paper tax return the following year, as a sort of reminder. The tax authorities do not send them anymore; that saves on postage. If you want a paper tax return or if you have not received your tax return yet, you must contact your local tax office and ask them to send you a form. If you have difficulties locating your tax office, check p. 2 of last year's tax bill (under ‘Calcul’), check the website of the Finance Ministry or call 0257 257 57. This is a call centre that answers most tax questions. This is also where you should go if you lost or misplaced your tax return. Do not use a photocopy of a friend’s tax return; that would only get you both in trouble. 11


We received a tax bill instead of a tax return For many people, the tax authorities already have all the information that they would put in their tax return. To make life easier for retirees, people with an invalidity or unemployment allowance, or students over 18 who have some limited income. Instead of a tax return, they send them a letter with a provisional tax bill calculating how much tax they will have to pay based on the information the taxman already has. About a million taxpayers will receive a "proposal of a simplified tax return" (see model in Dutch / French / German).

All you need to do is check whether the information is correct; if so, the definitive tax bill will come quite soon. If there is something missing, you have to report that by 30 June (or online before 16 July). What the taxman does not know is that you have overseas bank accounts or insurance policies or that you receive maintenance. Moreover, you may have to pay the tax on securities accounts (for the last time, see p. 44) or you may want to recover some withholding tax on dividends (see p. 37i). Unlike last year, the tax authorities do not send this provisional tax bill by mail anymore. You need to check your eBox online (www.mye-box.be) .

I am late If you forget to file (or to sign online), you risk a fine between â‚Ź50 and â‚Ź1,250 and a penalty of 10% to 200% of the tax. The highest penalties are really for persistent repeat offenders. What is more important is that the taxman can just ignore your tax return when he assesses the tax. 12


Filing on paper or online? Why file online? What are the advantages of filing online? -

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first of all, you have more time to file, until 16 July. it is more user-friendly than completing the paper form. You work on a traditional tax return where you see clearly what you are doing. If you file on paper, you have to make a draft first and then copy the codes and numbers on a form that will be scanned. Tax-on-web also shows you the codes you completed last year. The online form is pre-completed with the information that the tax authorities have received from your employer, the pensions office, banks, etc. You just must check that the information is the same as they have given you. Tax-on-web checks that you haven't omitted any required information. E.g. if you take a deduction for your mortgage, the program will remind you to name the bank. When you make a mistake, the form will point it out but not all mistakes are errors, and it can be frustrating when you can’t move on. There is a wizard to help you complete your tax return correctly for mortgages. The deduction for mortgage payments is probably the most complicated part of filing a tax return You can save interim versions and continue another day, or from another computer. You don’t need to file all the justification documents that you normally file with your return. You can scan them and attach them as a PDF file, or you can keep them at home until the taxman asks for them. An online return cannot go missing in the mail and it is also processed more quickly, and you receive your tax bill sooner.

Are there any disadvantages? You do all the work and all he needs to do is press the button to send you the bill. And are they not rushing out the tax bills while holding on to reimbursements? There is no evidence to that. True, it is easier for the taxman, but scanning paper tax returns has already sped up the process. The taxman still has to check the figures. And so should you when you get the bill. Moreover, once you file online, you don't receive a tax return anymore, and seeing the brown envelope on your mantelpiece is a useful reminder for us procrastinators.

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Who cannot file online? You cannot file online if you have recently separated and want to file separately.

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Filing online To file online, you log in with your electronic id card, a token or via Itsme. Itsme is a Belgian app that you can use to identify yourself with the tax office and other government services. You download the app from the AppStore or Google Play and you activate it once with your bank card or electronic identity card. With Itsme, you can login to Tax-on-Web with a 5digit code on your smartphone. To log in with your electronic ID-card (the one with a chip), you need a smart card reader, and the PIN code you recorded when you received your id card. If you lost your PIN-code, the commune can give you another one with your puk code (that you can find on the document that came with the original pin code – if you don’t have that anymore, you will have to ask the commune to reset the pin code).

Setting up the software for the e-card reader may be the trickiest part. Keep in mind that you may have problems if you do not use one of the traditional browsers (Internet Explorer, Firefox or Chrome).

My identity card doesn't have a chip This is usually the case if you live abroad. You will have to apply for a token ; you can register with FEDICT (servicedesk@fedict.belgium.be) to identify yourself with some 15


identification such as your national number (on the back of your ID card or your tax return) and the number of your ID card. You choose a username and a password and receive an email with a link to confirm. Your ‘token’ arrives by mail about ten days later.

It's a card with 24 codes like SOLIPE or WAPERI. When you log on to Tax-on-web, or when you sign in, you will have to asked to identify yourself with e.g. code 13; just type WAPERI and you are in.

How does Tax-on-web work? When you log in, you open your own Taxbox on Myminfin, and when you click on remplir

you find something that looks like an actual tax return (it is the document préparatoire that normally comes with your paper tax return. You will see that when the tax authorities already have the information, the boxes will already be filled out. That is the case for the identity of your dependent children, the 16


cadastral income of your house, your salary and the wage withholding tax or your titres services ‌ On each page you can click and get online explanation, you can add a comment or attach a PDF-file. The help files don't offer much more information explanatory booklet that the tax authorities give you online.

Calculate the tax Before you sign and finalise your tax return, you can calculate how much tax you will have to pay. It is a rough estimate because the calculation doesn't take account of complicated issues like cross border workers, overseas income, etc. That calculation isn't the tax bill; that will come later.

Don't forget to sign The tax return is not filed unless you sign with your PIN code (if you have an electronic id card) or with your access code. Spouses and partners who file a joint tax return must log on and sign separately with their PIN code or access code. As long as both spouses andpartners have not signed, the return is not filed. When you have both signed, you receive a confirmation of the date and time of filing. I suggest you print it or save a copy. You can always check the summary of your tax return in your Taxbox. It isn't a bad idea to save a copy as well. You don't need to send a copy of the confirmation or the PDFsummary. Once the tax return is filed, you can still correct your tax return online until 16 July. If you need to change anything after that date, you will have to contact your local tax office. You can call them or just send them a letter saying: "in code 1030-10, please replace 1,000 by 1,500".

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The paper tax return Let’s open that brown envelope; what will you find?

The tax return You cannot miss it; it is the document with a little text and columns in red. You can find the model here in Dutch and in French (see on the left page). It resembles a lotto form, and just like a lotto form it is scanned. Just seeing it is quite disheartening, with columns to complete. It is all a question of putting the right number or X with the correct code. And you get these codes from the draft form.

The draft This is where you start the draft to help you file your tax return. There are three (slightly) different tax forms for people who live in Brussels, in Flanders or in Wallonia, all in two or three languages (Brussels (NL) / Flanders / Wallonia). This is because some tax incentives or tax reductions, e.g. for mortgages, cheques service, renovation … are given by the regions. And separate tax returns help avoid unnecessary mistakes. Whether you receive a Brussels, Flemish or Walloon tax return depends on the region where you were registered with the commune on 1 January 2020. It's a guide to filling out the tax return per type of income or expense. You need to work out what income goes in what box and with which code and then you copy the codes and the information in the tax return. If you work as a freelancer, a self-employed professional or the director of a company, you also need “part 2” (Dutch/French). Note that there are no different models per region. When you copy the codes on the tax return, a few suggestions from the taxman: - use a black or dark blue pen, - write within the blocks, in capitals and in clear digits. - don't put in any unnecessary mentions or even ‘nil’. - don't strike out mistakes, use correction fluid. - If you have to give more information, don't write it by hand, the scanners have difficulties with handwriting.

The green page If you want to attach any documents justifying deductions or tax credits, you should attach them to the green page. It has all your information and it is scanned with the attachments. You aren't obliged to file these documents; you may just keep them at home until the taxman specifically asks to see them. However, if you want to give additional information 19


or if you have made a calculation of allowable expenses, I suggest that you attach a printed page with the information so that this information is on file immediately.

The explanation The tax authorities used to send a booklet explaining the tax rules with your tax return. They don’t do that anymore. You can find the explanation in Dutch or French online for each of the three regions (Brussels, Flanders or Wallonia).

The envelope When you have finished copying all the codes in the tax return, make sure that both spouses or partners sign it. And when you put it in the envelope, the address of the tax office goes behind the window. Do not forget the stamp. Postage isn't free.

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Help!? Don't get daunted by the tax return; it looks more complicated than it really is.

How difficult is it really? For most, filing a tax return should not be that difficult. It is just a question of copying the numbers from one piece of paper onto another one. The first time, things may be quite straightforward because you only have your salary to declare. There should be only about ten codes to complete. What is more, the taxman already has most of the information that you will be reporting. If you file online, you will see that the information is pre-completed. Filing a tax return takes more time and concentration when you get married, take out a mortgage or pay your household help with titres services / dienstencheques, if you have made tax deductible donations, have put money aside in a pension saving account ‌ Filing your tax return can take between three and five hours Once you are used to it you can get the job done in about one to two hours (the taxman calculate that it only takes half an hour). Make no mistake: that brown envelope releases the inner procrastinator in you and on the last day you will be chasing these little bits of paper.

Can I get help? This is a short guide to filing your tax return. If you need professional help, you can work with an accountant or a tax adviser. Not only do they have experience, they can also buy you time; they can file your tax return online until 22 October. You should know that the tax authorities are also available to help. However, due to the pandemic, you cannot meet them anymore in their offices, in town halls or in shopping centres. Unlike last year, you cannot meet them in their office anymore . If you want them to help you, you must call the number on the envelope and make an appointment with the tax man or woman for a telephone call. They will help you complete your tax return ; after the call they will send you a report by mail. You can sign that report and send it to the scanning centre, or you can file your income tax return online via Tax-on-web. Be sure to have your tax return, your electronic identity card, your papers, pay slips, certificates for tax deductions (mortgages, life insurance, pension saving, donations, child 21


care, maintenance pay, titres services, etc…, your tax bill for last year, and the tax bill for the real estate tax (“précompte immobilier”). There is a checklist on p. 23. The tax man certainly has a lot of experience, but he cannot give you more time; the deadline for paper filing is still 30 June and for online filing 16 July. There is no shame in asking; about 1 million Belgians check with the taxman.

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Checklist Hopefully, you have put all the documents you received in one envelope or box: your salary or pension statement for 2019, certificates of donations etc ‌. Which documents and certificates do you need to prepare your income tax return: Earnings: -

salary statement; holiday pay statement (if not paid by your employer); unemployment benefit statement; illness or occupational injury benefit statement; pension statement; all documents evidencing tax deductible expenses relating to your job; e.g. for self-employed: certificates confirming social security paid, private pension (VAPZ/PLCI) contributions, reimbursement of professional loans; your personal contribution to the mutuelle/ziekenfonds;

If you have real property -

the annual bill(s) for the property tax (prĂŠcompte immobilier/onroerende voorheffing); if your tenant is a company or a professional: a summary of the rent received and the identity of the tenant(s); if you have taken out a new mortgage: the certificate delivered by the bank with details of the mortgage; mortgage payment certificate(s); mortgage insurance premium certificate;

If you have income from savings and investments: -

bank statements showing interest and dividends received;

Certificates justifying deductible expenses: -

premium(s) paid for ordinary life insurance by way of long-term saving; contributions paid for pension saving; titres-service /dienstencheques; child care payments; personal contribution to public transport season ticket; tax-deductible donations;

Other documents: -

proof of maintenance paid (+ identity of the beneficiary); 23


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summary of maintenance received (+ identity of the payer); certificates relating to energy saving expenses and expenses (with invoices and proof of payment); certificate of co-parenting arrangement; advance tax payments; self-employed : income, social security paid in 2019 and list of expenses.

Other useful information: -

changes in the family situation (marriage, divorce, ‌); name and date of birth of dependent children; identity of other dependents;

It is also a good idea to start with last year’s tax bill to see which codes you used then.

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The tax return in detail Let's have a closer look at the boxes on the tax return.

I. – Bank account and contact details This is the easy part. If you expect a tax reimbursement, make sure the taxman has your bank account number. If it is printed on the tax return, you don't have to give it again, unless you want to change the number. If the tax authorities do not have your bank account, they will mail you a cheque that you can cash in at the post office. This is also where you can give your telephone number; you don’t have to give your email address anymore. The taxman still prefers to send letters to keep things official, but more and more they agree to correspond by email.

II. – Your family situation This is one box where people make a lot of mistakes. Check box 1001 if you are single or living with your partner and you haven't formalised your partnership.

Spouses and registered partners 2020 It is only if you are married or in a registered partnership that you file your tax return together but only for the following year. If you are currently married or registered partners, check box 1002 or 1006 respectively on your separate returns. You only file jointly if you married or registered your partnership before 2019. If you did so in 2019, you file separately this year and you check the relevant box (1003 or 1007). If your spouse or partner died, you check code 1010 as a widow(er). If you lost your partner or spouse in 2019, you have to file on paper. You need to check code 1011 and then opt for a joint or separate filing. If you need to report your deceased partner's income, you use the codes 1022 to 1027. Check other codes if your registered partnership has ended or if you are divorced (1014) or took up separate residences (1018). However, if that happened in 2019, you also need to tick the following box because you still file jointly for the year of the separation or divorce; you can ask to file separately but you cannot do that online.

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Officials of international organisations and their spouses or partners file separately unless the official's income was €10,940 or less. The official of one of the European Institutions or an international organisation ticks 1062. By checking 1020, you confirm that your income as an official was over €10,940 so that you don't get the benefit of the "marital deduction" (see p. 9). The spouse or registered partner of the official files a separate tax return and checks code 1021. They must mention that their spouse or partner is an international official so that the taxman doesn't give them this marital deduction.

Dependents Dependants are all the people who live with you and who are financially dependent. A spouse or a registered partner cannot be a dependent. Your direct dependents are all the children you had on 1 January 2020 (code 1030). To be dependent they must live with you and not have any personal financial resources or get child support in excess of €3,330. For single parents, the threshold is €4,810(see p 10 and Child support on p. 39). A child born on 30 December 2019 is as much a dependent as a child born on 2 January 2019. For each child, the highest earner gets an additional allowance on top of his personal allowance of €8,860. The allowance is €1,610 for one child €4,150 for two children €9,290 for three children €15,030 for four children + €5,740 for every additional child. When the parents co-parent, they each get half of this allowance, unless they pay maintenance (see p. 39).

Older children Children who are at university during the week are still considered to be living with you if they keep their registration with the commune. And if they were working to pay for some pocket money, they can earn €2,780 and that will be disregarded as personal financial resources (see p 10).

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The cut-off date is 1 January 2020. This means that your daughter who was financially dependent for most of 2019, will not be a dependent for tax purposes if she started working in September.

Co-parenting If the children are under joint custody and living alternatively with each parent, the parent with whom the children are officially domiciled gets the tax allowance for the children. Nevertheless, the parents can agree to share the tax allowance by giving the tax man a copy of the court decision or agreement between parents. The parent with whom the children are domiciled fills out code 1034; the other 1036. All dependents give you a higher tax allowance that is tax free. If you don't claim a tax deduction for child care (see p. 41), you get an additional personal allowance of â‚Ź600 if you fill out code 1038). That allowance can be shared as well.

Other dependents Some other family members can be dependent too: your parents, grandparents, brothers and sisters if they are over 65 (code 1043). Your foster parents can also be a dependent. Dependents cannot have more than â‚Ź3,330 in income (other than â‚Ź26,840 in pensions).

Arriving or leaving Belgium in 2019 If you arrived in Belgium in 2019, or left Belgium in 2019, you do not have a full tax year and only the part of your income that you received while resident in Belgium is taxable. This means that less income is taxed at the lower tax rates. For that reason, the allowances above are prorated according to the number of full months you were in Belgium; that is the months that you are here on the 15th. You must put the number of full months in code 1199/2199.

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III. – Real estate In box III, you declare the income from any real estate you may own, that can be actual rental income you receive or the theoretical income from a second or third residence. If you only own the house you live in, you don’t need to declare anything at all, unless you rent out part of your house. If you have a second residence, you need to declare the cadastral revenue. That figure can be found on the real property tax bill (the précompte immobilier/onroerende voorheffing). If you own it together, you each declare your share (normally 50/50) in your column (code 1106/2106). That cadastral revenue will be multiplied with 1.4 and corrected for inflation. Roughly speaking you will pay tax on 2.55 times the cadastral revenue.

I have a buy-to-let If you own a rental property, you normally don't declare the actual rent, just the cadastral revenue, also in code 1106/2106. If the tenant is a company or someone who uses the property for his profession (e.g. a physician or an accountant), you must declare the rent you receive under code 1109/2109. You pay tax on the rental income minus a deduction of 40% (however, that deduction is limited to 3.05 times the cadastral revenue).

And property abroad? If you own property abroad, you need to declare that as well (normally in codes 1130/2130) as Belgium will normally have a double tax treaty (list) with the other country. If there is no treaty, the codes are 1123/2123. If you receive rent, you need to declare the rent, but if you don’t (e.g. because it is a second residence), you need to declare the rental value. That is the rent you would receive from a tenant if it were let out. In general, the best thing to do is ask an estate agent to give you a rental value. In 2018, the European Court of Justice has condemned this rule for properties in other EU Member States. Belgium must adapt this rule but there is no political will to do so. Nevertheless, the tax authorities will accept a fixed value, such as the French "valeur locative" (multiply by two and deduct the tax foncière), 2% of the Spanish "valor cadastral" (1.1% if it has been determined after 1993, minus the tax) or 4% of the valuation of real property in the Netherlands. You cannot take any deductions for expenses, but the tax authorities automatically deduct 40% to cover maintenance and repairs. You can, however, deduct the income tax you paid on the property abroad. 29


Although you have to declare the rental income or the rental value, that doesn't mean that you will actually pay tax on that income. The double tax treaty doesn't let Belgium tax rental income., see "Cross border taxation" on p. 35. This means that rental income is not taxed but pushes the tax on other income that is taxable in Belgium in the higher tax brackets.

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IV. – Salary Box IV is relevant for most people. It relates to remuneration paid to an employee (A), unemployment benefit (B), allowances paid during illness or invalidity (C) etc. You have received a salary statement (281.10), or a statement confirming other benefits paid during 2019, and next to each figure, you will find a code that corresponds to the codes in the tax return. E.g. your salary statement shows code 250 to the left of your salary and 286 next to the tax withheld at source. The numbers must then be copied under codes 1250 and 1286 (for the husband) and 2250 and 2286 (for the wife). If you have received a specific form of salary, e.g. an indemnity in lieu of notice (262 or 308), or stock options (249), these have different codes because they are taxed in a different way. An allowance for using public transport is tax exempt if you declare it in code 1255/2255 (A.8). An allowance for using your own car is tax exempt but only up to €410. A "non-recurring profit-based bonus" is tax exempt up to €2,941 if you complete the bonus under code 1242 (A.9) – you do not have to claim the exemption anymore in code 1241. If you were working as a freelancer, if you were a self-employed professional or contractor or a company director, you will have to download “part 2” (Dutch/French) of the draft tax return. The information you put there goes in the same pink tax return

Work outside Belgium If you have received remuneration for work outside Belgium and if that income is taxable in the other country under the relevant article of the double tax treaty (usually article 14 or 15, see the list), you must still include that income in your tax return. You must mention that you claim the exemption at the end of box IV under letter O. If you file on paper, you will have to copy that information in the corresponding box on p. 3 of the pink tax return. It is advisable to attach a note to your tax return to explain for what reason the income is taxable in the country where you worked, e.g. mention the article of the double tax treaty. See p. 35 for "Cross border taxation". Expenses In Belgium you pay tax on net remuneration, after social security contributions and after expenses of employment.

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You do not have to prove your expenses; you are entitled to an allowance calculated as a percentage of your earnings. If you earn more than €16,033,the maximum is € 4,810. If you think you can prove higher expenses, you can do so but it will take a bit of work. -

Only expenses that are necessary to carry out your job are allowable.

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For the commute to and from work by car, you can deduct €0.15 per km (€0.24 if you cycle to work).

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If you use your own laptop or table, or other office equipment, you can deduct part of these if you use them for work. Larger equipment and office furniture must be depreciated. This means that every year you deduct a percentage (e.g. 10% for furniture over ten years, 33.33% for a laptop over three years). And then you have to determine how much is work related.

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Costs that aren't exclusively professional (e.g. you use your laptop to check your private emails) are only partially allowable depending on the use (e.g. 80/20 for the use of your laptop). Only the part that relates to your job is allowable.

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If you use a room at home as your office, you can deduct a percentage of the purchase cost of your house and the interest on the mortgage, of the electricity, etc. The percentage depends on the size of the room. If you are renting, check if the rental contract allows this, the landlady has probably forbidden this because she will pay more tax if you deduct part of the rent.

-

The cost of clothing isn't allowable unless it is very specific for your job, like overalls or a lab coat. Suits and handbags aren't tax deductible.

If you want to deduct expenses, detail them in a spreadsheet and the total goes in code 1258/2258. If you leave it blank, the taxman will deduct the fixed allowance of €4,810. If you deduct your expenses, you must assume that the tax man will ask you to prove them and will want to see the invoices and receipts. Try not to be too creative. If your employer reimburses you for expenses you paid for him, that reimbursement isn't taxable income, but these expenses aren't allowable either. If your employer does not contribute to a pension scheme for you, you can contribute – via your employer - up to 3% of your salary into a private pension scheme with a minimum of €1,600 per year (code 1387/2387). This can give you a tax saving of 30%.

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Unemployed? If you are unemployed, you can also deduct some expenses, but there is no allowance. Allowable expenses would be your union contribution, the cost of traveling for training, postage stamps for job applications, ‌ There is, however, no specific code for expenses; you deduct the expenses from your unemployment benefit, and you declare the net income in code 1260/2260.

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V – Pensions Box V is for pensions and other similar income. The Belgian state pension goes in code 1228/2228 and a survivor's pension goes in 1229/2229. The tax that has been deducted goes in code 1225/2225. Other pensions such as the complementary pension paid by a pension fund or other pension scheme are to be reported usually under code 1211/2211. Pensions paid by the European Institutions are not liable to tax, but pensions paid by other international organisations usually are. In Belgium, employer funded pensions are geared to be paid out in the form of a pension capital. There is a 5.55% social security contribution and a fixed tax rate of 10% if you take your pension at the legal retirement age of 65. The code will normally be 1215/2215. If there are special forms of pension, the pay slip issued by a Belgian organisation will clarify the code. If it is an overseas pension, you have to work out in which code the pension goes. Please note that if you receive an overseas state pension that may be liable to tax in the other country. If you receive a government pension from another country, that will almost always be taxable there. Private pensions paid by an overseas pension fund or scheme are usually taxable in Belgium but that depends on the double tax treaty (check the list), e.g. a pension from the U.K. is normally taxable there, unless you took out your pension for the first time before 2013. If the double tax treaty states that the pension is taxable in the other country and that Belgium must exempt it, you must report the pension but you must mention that it is exempt at the end of box V under letter C. Do not forget to copy that at the bottom of p. 3 of the actual (pink) tax return.

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Cross border taxation If you live in Belgium and you have income from another country, both countries will want to tax the entire income and that may result in double tax. To prevent double taxation, states sign “conventions for the avoidance of double taxation". In these double tax treaties, the two states agree which of them can tax business income, rental income, dividends, interest, royalties, salaries, pensions, etc. More importantly, the treaty also says what they must do to prevent double taxation (that is “treaty relief”). It isn't as simple as "I live and work in Belgium, but I work for a US company and I am paid on my US account, so I don't have to declare my salary in Belgium". You really need to read the text of the actual treaty (see the list) ; double tax treaties have a similar structure, but no two treaties are the same. -

for rental income, all treaties say that the income is taxable in the other country and that Belgium has to give treaty relief.

-

for remuneration, you only pay tax in the other country for the days* you actually work there and - if you worked there 183 days or more in a year, or - if you were paid by a local company, or - if you were paid by the local branch of a company. * Note that if you live in Belgium and work in the week in Switzerland for a Swiss company, you pay tax in Switzerland but only for the days you actually work in Switzerland. If you work at home on Fridays, or if you have to take a business trip to the US, your income for those days isn't taxable in Switzerland but in Belgium. ** Note for Corona-times and your tax return next year : due to Covid-19, workers have to work from home in 2020. This means that they would be taxed in Belgium on their salary for the days they were working from home. Belgium is concluding agreements with France, Luxembourg and the Netherlands to agree that the days of confinement at home are not deemed to be working days in Belgium (see “Taxes in Corona Times”).

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government remuneration and pensions are usually taxable only by that government;

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state pensions are mostly - but not always - taxable in the country that pays the pension; 35


-

private pensions are usually - but not always - taxable in Belgium if you live here.

If the income is taxable in the other country, you still have to declare it in Belgium. Belgium gives treaty relief by way of “exemption with progression�. This means that Belgium looks at all your income to determine the average tax rate but exempts the income that is taxable abroad. This means that the income is exempt, but it pushes your other income (the income that is liable to tax in Belgium) higher up in the progressive tax rates. For remuneration you have to complete box IV.O

For pensions, that is box V.C.

Dividends, interest and royalties are taxable in both countries, and usually the tax withheld in the country of source is limited to 10 or 15% when you present a certificate of residence. In Belgium you declare the net income after tax and you pay 30% tax on that net income.

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Savings and investments VII. – Investment income Box VII is for the income of your investments, i.e. dividends and interest. These are normally taxed at source; the (Belgian) bank or the company that pays the dividend deducts 30% tax when they pay out. If that is the case, you don't have to declare the interest or dividends in your tax return, but foreign banks do not withhold Belgian tax. If you received interest on a regulated savings account, that is tax exempt up to €980 per spouse or per partner (that is €1,960 for a couple). Any interest over €980 is taxed at 15% and must be reported in code 1151/2151. The same applies to comparable savings accounts within the European Economic Area. If the bank pays you more than €980, it will deduct 15%, but the bank doesn't know if you had interest on other savings accounts. If the total interest on all your savings accounts, in Belgium and abroad, is more than €980, you have to complete code 1151/2151. Dividends and interest on non-regulated savings accounts is taxed at 30%. It is only when the bank has not deducted the 30% tax - mostly because it is a foreign bank - that you have to report the dividend or interest income under the correct codes, usually 1444/2444. Moreover, you can now recover the Belgian withholding tax on dividends with a maximum of €800 per spouse or per partner (that will give you a tax saving of €240 if the withholding tax was 30%). You will have to do your homework and make a list of all the dividends you received and the withholding tax deducted. The Belgian withholding tax that has been deducted from dividends from Belgian companies goes in code 1437/2437 with a maximum of €800. Dividends from overseas companies must be reported in code 1444/2444, but you can deduct the rest of the exemption of €800 first. 30% on interest and dividends is quite high as a tax, compared to 15% just a few years ago. If you have little taxable income, you may opt to have your dividends and interest taxed with your other (taxable) income at the ordinary tax rates. You can deduct the bank charges, the first €8,860 is exempt as a personal allowance, and then the tax rates start at 25%. If the average tax rate is less than the 30% withheld at source, the difference is reimbursed.

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Overseas bank accounts Interest and dividends received on overseas bank accounts has to be reported, usually in code 1444/2444. The other country will also want to tax the dividends or interest. Under the double tax treaty (see the list), that will be a maximum of 10 or 15%; usually you will have to provide a certificate of residence in Belgium. If tax has been deducted, you report the net income after tax and 30% tax is due on the net. If you have received dividends, you may also have a securities or brokerage account, do not forget to report these overseas bank accounts and if they are worth over â‚Ź500,000, check the box under securities accounts (see also on p. 29).

Bank charges There is a code 1170/2170 to report the fees and charges you pay to the bank. They are usually not deductible unless you pay tax on the dividends and interest at the ordinary tax rates rather than at the fixed rate of 30% (see above).

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Maintenance VI. – Alimony and child support If you receive alimony, you must declare it in Box VI under code 1192 and you will be taxed on 80% of the maintenance. There are separate codes for maintenance that is paid retroactively following a court decision (1193) and for maintenance that is paid in a lump sum. In that case you have to declare a percentage of that capital every year.

Child support If you receive child support, you don't declare that in your own tax return (see p. 10). You need to file a separate tax return for each child, and you declare the child support in code 1192. As long as the child support is less than €11,075 per child, or €922.92 per month, they will not pay any tax. Only 80% of the child support is taxed and 80% of €11,075 is €8,860, which is wiped out by the personal allowance of €8,860. Even if they do not pay tax, children who receive more than €4,163 in maintenance are not dependent any more. The threshold is €3,330, and that is 80% of €4,163. In any case you need to identify the person who pays the maintenance, even if they aren't Belgian residents, and if you file on paper on the relevant box at the bottom of page 3.

VIII. – Maintenance paid If you pay alimony and/or child support to your ex, you can deduct 80% from your income. Maintenance paid can be deducted up to 80% if - you have a legal obligation under the civil code (or an similar rule abroad) or under a court order to pay maintenance to an ex, (grand)children, (grand)parents, parents-inlaw or children-in-law; - the beneficiary is destitute; - they don't live with you; - you pay regularly and the sums aren't excessive. 39


You need to identify the person who receives the maintenance on p. 3 of your paper tax return. The tax authorities have warned they are going to pay particular attention to payments made to beneficiaries in other countries. Depending on the double tax treaty between Belgium and the country where the beneficiary lives, you may have to deduct withholding tax and pay that to the State.

Some planning opportunities When one parent pays maintenance, she can take an 80% deduction for her payments if the children are domiciled with the other parent. However, she gets no allowance for dependents; the other parent will be entitled to the full allowance. They both pay less taxes, â‚Ź100 paid in maintenance gives a tax reduction of about â‚Ź40.

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IX. - Mortgages In box IX you mostly report interest and mortgage payments to buy your main residence (under I) or another property (under II). The tax incentives to buy your main residence are a regional matter and you will see that the codes relating to your main residence start with a 3 (for him, on the left) or a 4 (for her). The rules depend on whether you live. In Wallonia, it is called "chèque habitat". Brussels Capital region has kept the old federal rules for mortgages taken out until 2016 but replaced these deductions with a reduction on the purchase tax of 12.5%. Flanders has kept the “woonbonus” for mortgages until 2019 but since 1 January 2020, replaced it with a lower purchase tax. If you buy a second property, you are entitled to federal tax benefits (under II). That is mostly a deduction of the interest. If you file online, a wizard helps you complete your tax return for most mortgages taken out after 2004. The taxman knows, from the bank, how much you paid in capital reimbursements and interest and the wizard helps you claiming the correct tax deductions. It does not, however, optimise the deductions for you.

X. - Other tax reductions Box X is for all sorts of payments or expenses that you have made and for which you can claim a tax reduction. That goes from -

gifts to charities (1394): the minimum is €40 per charity. If you received a tax certificate from the charity, you recover up to 45% of the gift by reducing your tax bill.

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childcare (1384): you can deduct €11.2 per day of childcare in a crèche or other after school care centre for children up to 12. If you have children under 3, you may be better off with the additional allowance of €600 for dependents.

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pension saving (1361/1362), you can pay up to €980 per year to a pension savings fund or insurance, that can give you a tax saving of 30% or €294 ; you can opt for a 25% tax saving with a maximum of €1,260, the saving is €315.0. If you pay more than €980 in pension savings, the taxman will assume you opt for the 25% tax saving. Also keep in mind that when you get a tax reduction now, when you turn 60, the bank will deduct 8% tax even if you continue pension saving.

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titres services/dienstencheques (3365/4365, but 3363/4363 in Flanders) and PWAchèques / cheques ALE allow you to pay for certain personal services, like cleaning. If 41


you pay with these cheques, you can recover 15% in Brussels on a maximum of €1,500 per spouse or partner; that is €225, so that you only pay €7.65 for a cheque of €9. In Flanders, you recover 30% or €450. In Wallonia, the tax reduction is 10% with a maximum of 150 titres, that is €135 per spouse or partner. -

If you have legal protection insurance you can report the premium (1344/2344) with a maximum of €310 per year and that can give you a tax saving of 30% or €93.

XII. – Paying your tax in advance : “Versements anticipés” If you have paid your tax in advance, e.g. because you don't have an employer who deducts the tax from your salary, you report that under 1570/2570 in Box XII. Paying the tax in advance is highly recommended, in particular for self-employed. Not doing so results in a tax increase of 2.25% of the tax. If you don’t have to pay the tax in advance (e.g. the tax on dividends you receive abroad, you are entitled to a tax reduction of 1.125%.

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XIII – Overseas bank accounts and insurance In box XIII you have to confirm whether you have bank accounts outside Belgium, even if you didn't have any income on these accounts.

Overseas bank accounts You tick the box with code 1075, list the countries where you have bank accounts with the name of the account holders. You also tick the box to confirm that you have reported these accounts. In fact, you don't report your accounts to the taxman but to the National Bank.

Why is that? Belgium has banking secrecy rules; the taxman cannot look at your bank accounts. However, in some circumstances he can investigate your bank accounts. To keep up the appearances, the banking secrecy is maintained by storing the information with the National Bank. The National Bank has the list of your Belgian bank accounts, but you must report your overseas bank accounts yourself. You can do that online (with your electronic identity card) or on a paper form. When you open or close an account, you must report that as well.

How much is known about my bank accounts? There isn't much information in the National Bank’s database, just a list of your bank accounts. That list helps the taxman when he wants to investigate your bank accounts, but he can only get that list if he has indications of tax fraud or if he has indications that your spending is higher than the income you declared. What is more, he must give you a chance to volunteer that information. 43


There is no information about the money on your accounts, but that is just a matter of time (see "Nowhere to hide", p. 47)

Life insurance You must also report that you have overseas life insurance policy (check the box at code 1076). However, no further information must be given about the name of the insurance company, just the names of the policy holders and the country. You don't give the value of the insurance policies. Please note that life insurance is normally not taxable in Belgium. "Branch 21" policies are an alternative for savings accounts, and they are tax free if taken out for more than 8 years. "Branch 23" policies ("insurance wrappers") are linked to investment funds and they can go up and down. The gains are tax free.

Trusts You have to confirm whether you have set up a legal arrangement (a “construction juridique”) or whether you are the beneficiary of such a legal arrangement. This is a difficult word for a trust, a foundation or a foreign company in which you accumulate income tax free.

Cayman tax If you have such a legal arrangement, you must also declare the interest and dividends that accumulated in it. This is called the "Cayman tax". It is advisable to get some legal help if you have to pay the Cayman tax.

Securities accounts If you had Belgian securities accounts in 2019, the bank deducted the securities tax if it was worth more than €500,000 on average. If you had spread your holdings over several banks, they will not have deducted the tax. In that case, you have to check box 1072/2072 to report that you have more than one securities or brokerage account. In that case you have to report the tax yourself. If you only have one securities account, you do not need to check the box. See below about the “Securities Tax”.

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Capital gains As a matter of principle, Belgium doesn't tax capital gains if they are made by way of "normal management of private wealth". Private wealth is anything that you don't use for your job or for professional purposes. And the normal management of your private wealth is what you do to keep your wealth growing safely, without speculating. Speculation would be e.g. borrowing to get leverage to make more profit. In general, gains on the sale of shares or property are tax exempt, with a few exceptions: -

the capital gain on the sale of your main residence is always tax exempt, capital gains on a second residence or other property in Belgium are only tax exempt after five years. If you sell within five years, the capital gain is tax at 16.5 %. capital gains outside the normal management of private wealth are taxed at 33%, plus local tax (between 6 and 9 % of 33%). These include speculative capital gains. capital gains on the sale of an important participation in a company are liable to tax at 16.5% (plus local tax); if you are in this situation, check with your accountant. if you are a day trader, that may well become a professional activity and then your gains may be liable to tax, and possibly social security, as a professional investor.

Stock exchange tax Belgium has always charged a tax on stock exchange transactions, such as the purchase and sale of some financial instruments (bonds and stocks) on a secondary market, and the sale of mutual funds (UCITS), through a Belgium-based professional intermediary, a bank or broker. The tax is also due when you buy or sell through a foreign bank or on an online account. And you must declare and pay the stock exchange tax yourself, unless the overseas bank appoints a representative to do that. The rate varies depending on the nature of the instrument, and the tax is payable by each party to the transaction. The stock exchange tax is charged at : -

0.35% on the sale or purchase of shares (maximum €1,600 per transaction); 0.12% for bonds and mutual funds (max. €1,300 per transaction); 1.32% on the sale of accumulation mutual funds (capped at €4,000 per transaction); When a distribution fund redeems its units, no tax is due, but the sale or purchase of such units on the secondary market is taxed at 0.12% (max. €1,300).

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Belgian residents who must pay the stock exchange tax must file a tax return and pay the tax before the end of the second month following the taxable transaction.

Securities Tax In 2018 Belgium introduced a wealth tax ; in 2019, the Constitutional Court declared the tax discriminatory and annulled the tax … for the future. This means that you must pay the tax a last time in 2020. What is this tax? If you own one or more securities or brokerage accounts with a bank, a brokerage firm or an investment firm and all your securities accounts together are worth more than €500,000, you have to pay the tax on securities accounts. What is taken into accounts are stocks and share certificates, bonds and bond certificates, units in common investments funds, cash bonds and warrants. The securities tax is not due on pension savings funds, branch 21 and branch 23 life insurance, registered stocks and bonds, options, futures or swaps. If all your securities accounts together are worth more than €500,000, the tax is 0.15% of the average value of the account, not just on every euro over €500,000. The value is the average of the values at the end of each quarter (31 December 2018, 31 March 2019, 30 June 2019, and 30 September 2020. If you have a securities account with a Belgian bank, the bank has charged the tax to your account, reported it to the tax authorities and paid the tax by 20 December of last year. If the bank has not withheld the tax because your account was under €500,000, because you have accounts with more than one bank or brokerage firm, you can ask the bank to declare and pay the correct tax. Alternatively, you can file the tax return with the form you can find here and pay the tax yourself. This is in particular the case if you have overseas bank accounts. You can do this with an online tax return via www.MyMinfin.be. For the tax due for the period from 1 October 2018 to 30 September 2019, you must file the tax return no later than the last day before your income tax return (30 June on paper or 16 July online). You do not report the value of your securities accounts in your income tax return, but you must mentio if you have more than one securities accounts (see p 44). The securities tax must be paid by 31 August 2020. Penalties range from 10 to 200 percent of the tax.

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Nowhere to hide For years, many people thought they could safely "forget" the income they had outside Belgium; the taxman would never find out. The EU Savings Directive was a rude wake-up call as the Belgian tax authorities started receiving information about overseas bank accounts and enquiring about overseas bank accounts. And when Belgian banks started reporting to the tax authorities abroad, they thought "Surely, Luxembourg and Switzerland would never do that ‌ ". Even that is a thing of the past.

Common Reporting Standard The Common Reporting Standard is the world's answer to FATCA, the American law obliging banks all over the world to report the bank accounts of American citizens' to the IRS. The Common Reporting Standard goes further; it is a Global FATCA. This year, banks, brokers and certain insurance companies and collective investment vehicles in 102 countries will be reporting about your financial situation and income in 2019 to the Belgian tax authorities. What information will they receive? - the numbers of all your bank accounts, - the investment income before tax: interest, dividends, income from certain insur - the proceeds from the sale of financial assets (stocks, bonds, mutual funds, ‌); - the account balance or the value of the account or insurance policy; This is why your bank keeps asking for a copy of your identity card: they need your contact details and your taxpayer identification number (TIN) so that the information ends up in your tax file. And if you have a company or a trust, the bank has to look through it to find the ultimate beneficiary. Albania, Kazakhstan, Ecuador, the Maldives, Nigeria, Oman and Peru will follow suit in 2020, and this Global FATCA network will only expand. All offshore financial centres (like Liechtenstein or Panama) are already participating, except for Palau (where is that?). You cannot hide your wealth anymore unless you open a bank account in Afghanistan or Zimbabwe. The EU Member States have agreed to go even further. Since 2014 they are exchanging other information that they have, e.g. through the tax returns you file there, or employer's or pension office statement. Your taxman knows that you have: - income from employment; 47


-

director’s fees; pensions; life insurance products; real estate and rental income.

All this must ensure that you don't forget to report any income.

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The tax bill Now that you have filed your tax return, all that you can do is wait for the tax man to send you the tax assessment or tax bill. The “avertissement extrait de role”/”aanslagbiljet” is really the tax bill for your 2019 income. If you have not seen one before, you can click here to see one. If the tax bill is not sent before 30 June 2021, the taxman may have to pay back all withholding tax but that happens rarely. If the calculation shows a reimbursement, you will receive that about two months' later. And if you have to pay tax, you have about two months as well. * Note for Corona-times and your tax bill for 2018 income : to help with Covid-19, the Belgian tax authorities is giving all taxpayers who received a tax bill since 12 March a further extension of two months to pay their taxes.

Receive the tax bill online When you file your tax return online, you still receive your tax bill on paper. If you want to receive it online, you need to activate your e-Box in www.mye-box.be You will always be able to find a copy of your tax bill (and all past tax bills) in your Taxbox, in MyMinFin together with the tax return you filed online in the past (in pdf format).

Check it If the bill was for several thousands of euros, you will probably have checked it. If, however, you saw that you will get some money back or that you will have to pay a few hundreds of euros, in two months’ time, you probably just put it on the pile of bills to be paid later. In any event, I would advise you check it to make sure that there are no mistakes. Have they copied your figures correctly? Does the result seem OK? Is it what you expected? If you want to do the calculations again, try the calculation again on this Tax-calc. If you have questions, you can always call the local tax office and ask them to explain how they made their calculations.

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And if the tax man made a mistake If you disagree with the tax bill, try to talk with someone at your local tax office first. The address, the telephone number and the email address can be found on page 2 of the tax bill (under ‘calcul’). If it is a simple mistake, they are often prepared to correct the mistake. If you cannot convince them, you have to appeal and file a “reclamation” or “bezwaar”.

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Contest the tax bill How and where you do that is explained on page 2 of your tax bill. You have to send a letter to the address in the middle of the page within six months after you receive the tax bill. That means the letter must arrive with the tax authorities within six months plus three working days from the date the tax assessment was sent out. That is the date on the tax bill. The tax authorities say they accept an appeal by fax or by email, but for the moment, I suggest you stick to pen and paper, scan it and send it by email and by ordinary mail. Preferably send the letter by registered mail so that you can prove the date. If you have waited until the last day, you can always bring it to the tax office and ask for a stamp confirming the date of receipt on a copy of the letter. Don't forget that, for the taxman, close of business is 4 pm. If you find the door closed, you can try and send it by fax; you never know, if there is paper in the fax machine, the taxman may accept it.

Do I need an accountant or a lawyer to file an appeal? No, you can do it yourself. Make sure that you have the correct address

and that you mention all the relevant references on the top of the letter, just under your address (your N.N. or national number and the NumÊro d’article) ; you can find those in the pale blue box on page 1.

Why not just attach a copy of the tax bill? Explain in detail why you don't agree. Maybe you forgot to mention a figure in the tax return, or the taxman himself overlooked a figure. Or all your expenses really are business 51


expenses and not private entertainment. Or the taxman got it wrong, and a particular type of income is indeed not taxable. The most common mistake is that the taxman forgets to give an exemption for overseas income. It is also advisable to ask for a meeting with the tax director. That may help you get your point across. Finally, don't forget to sign the letter with your spouse or partner if it is also their tax bill.

And if I wait too long? Six months seems like a long time, but they pass quickly. If you are too late, your request will be rejected, except in some cases. Sometimes the mistake is so obvious that it would be inequitable if the taxman didn't amend the tax bill. The tax authorities are allowed to reopen the tax file up to five years later if there are typos, miscalculations or glaring mistakes. Another reason for the taxman to reopen the file is when you have paid tax twice; in particular, if you paid tax in Belgium as well as in another country.

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Taxes in Corona Times We have already mentioned in the text above that Covid-19 has changed certain rules and habits. You cannot visit the tax office to get help to complete your tax return, that has to be done over the phone (see “Help!?”). You may have been forced to work from home and your employer can pay you a tax free allowance of €126.94 for working at home, plus €20 (for the use of your own pc) and €20 for the use of your internet connection at home. Workers who are working in a neighbouring country are normally paying tax there. However, when you work from home, you pay tax here for the days you work at home. The Belgian tax authorities have accepted that the lockdown due to Covid-19 is a case of ‘force majeure’. As you cannot travel to wprl, Belgium has agreed with Germany, Luxembourg, France and the Netherlands that for the period of the lock down – from the middle of March to the end of May or June – the days worked in Belgium do not count as days in Belgium. Self-employed workers may request a one-year deferral of the payment of their social security contributions for the first two quarters of 2020. They can also request a reduction of the quarterly social security contributions if they think that they will be earning substantially less. In general, there are extensions for filing VAT returns and for paying income tax, VAT and social security bills for employers. Tax audits have been put on hold. As notaries’ offices are closed, the deadlines for filing inheritance tax returns and for signing notarial deeds for the purchase of houses are extended by at least two months. It is now possible to give a digital power of attorney to one of the notary’s employees.

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