Self-employment and business income. Self-employment and business income is included in the total earned income. A deduction for actual professional expenses is also available against this income. To avoid a tax surcharge (2.25% of the tax for the 2024 income year) at the time of final assessment by the authorities, tax prepayments must be made.
Real estate income. Real estate income includes rental income from real estate that is used for a professional activity and, in certain circumstances, from real estate used for private purposes by the occupant.
Any Belgian resident taxpayer who owns real estate located in a jurisdiction other than Belgium must complete the real estate declaration form and submit it to the Belgian General Administration of Patrimony Documentation.
Nonresidents whose Belgian-source income consists only of real estate income are exempt from personal income tax if the annual rental income does not exceed EUR2,500.
Investment income Under the Belgian domestic tax law, investment income consists of dividends, interest and royalties.
Dividends, interest and royalties are subject to a final withholding tax.
Dividends up to an amount of EUR833 (for the 2024 income year) are exempt from tax. This exemption should be claimed via the annual tax return.
Special expatriate tax concessions. Effective from 1 January 2022, a new tax regime for inbound taxpayers and researchers entered into force. With the introduction of this new tax regime, the old expatriate tax concessions are to be replaced. All relevant information regarding the new tax regimes and the old regime is provided below.
Old expatriate tax regime. Foreign executives, specialists and researchers residing temporarily in Belgium may qualify for a special tax regime when they are assigned, transferred or recruited from outside Belgium to work for a Belgian operation of an international group of companies. The special expatriate status is obtained through a written application to the Belgian tax authorities that sets forth the reasons why the relevant employee should qualify. The application is filed jointly by the employee and the employer. It must be filed within six months after the beginning of the month following the month of arrival of the employee in Belgium.
Foreign executives, specialists and researchers qualifying under the special expatriate tax regime are treated as nonresidents for purposes of the Belgian tax law. As a result, they are taxed on Belgian-source income only. Accordingly, unearned income and real estate income arising outside of Belgium are ignored in the determination of Belgian taxable income.
Qualifying individuals are taxed only on employment income or directors’ fees relating to professional activities performed in Belgium.
Unless other reliable criteria are available, the amount of remuneration excluded from taxation in Belgium can be calculated as the fraction of the total worldwide remuneration that corresponds to the number of workdays performed outside Belgium compared to the total workdays performed (the travel exclusion). Special rules apply to the calculation of the exclusion. No maximum or minimum travel percentage is required to qualify for the special regime.
Certain allowances paid to the employee as a result of his or her temporary stay in Belgium are treated as deductible expenses for the employer and are non-taxable to the employee, within certain limits. An overall annual limit of EUR11,250 applies for qualifying expatriates working for regular operating companies. For qualifying expatriates employed by recognized headquarters, coordination offices, and research centers, an increased limit of EUR29,750 applies. The following are the most common recurring allowances:
• Cost-of-living allowance
• Housing differential
• Home leave
• Income tax
The tax-free allowances can be determined based on either the actual allowances granted by the employer (if these are based on recognized tables) or on a calculation method provided by the Belgian tax authorities (if no specific allowances are paid by the employer).
Expatriates are also allowed to exclude from taxable compensation the reimbursement of moving expenses by their employer and the reimbursement of education expenses for international primary and secondary schooling in Belgium and, exceptionally, outside Belgium. These exclusions are not subject to an overall limitation other than that the amounts reimbursed must be reasonable. In this context, lump-sum relocation allowances are considered taxable, in most instances, unless they are justified by specific relocation expenses.
Although the concessions are not granted for a fixed time period, the competent tax office has recently issued new guidelines, which set a review of the application after 10 years and 15 years. If the conditions for the regime continue to be met, the regime can be maintained after these reviews for up to a total of 20 years.
This regime has been abolished as from 1 January 2022. Nevertheless, expatriates already active in Belgium prior to 2022 can still benefit from these tax concessions until the end of 2023 by making use of the phasing out period. They are also given the opportunity to opt into the new expatriate tax regime on fulfilling all conditions (see New expatriate tax regime).
New expatriate tax regime. The regime for incoming taxpayers and the regime for incoming researchers was introduced, effective from 1 January 2022. To qualify, the taxpayer may not have had a connection with Belgium during the 60-month period prior to the start of the Belgian employment. This implies that the individual may not have been taxed as a resident in Belgium or as a nonresident on professional income and may not have been
opt into the new regime, provided that the aforementioned qualifying requirements of the new regime are met (the salary threshold must be respected for all prior years active in Belgium). This opt-in had to be done before 30 September 2022. The years under the old regime will be deducted from the five- or eight-year period during which the taxpayer can benefit from the new regime.
Taxation of employer-provided stock options. Effective from 1 January 1999, specific rules are included in Belgian domestic law relating to the taxation of stock options granted to employees, directors and other independent persons.
Options offered on or after 11 November 2002 are deemed to be granted on the 60th day following the offer if the beneficiary has given written notice of his or her acceptance of the option before the expiration of the 60-day period.
The benefit in kind arising from such stock options is taxable to the beneficiary on the date of grant on a lump-sum basis, regardless of whether the exercise of the option is unconditional. Under the lump-sum basis, the taxable income is determined as a percentage of the value of the underlying shares at the moment of the offer of the options (18%, effective from the 2012 income year). If the exercise price of the option is lower than the value of the underlying shares at the time of the offer, the lump-sum basis is increased by the difference.
In general, only the grant of an option results in a taxable benefit. If that is the case, the employee is exempt from tax on potential benefits arising from subsequent possession of the option, including benefits from the exercise or sale of the option or from the sale of the underlying shares.
No social security contributions are required with respect to such options, unless the options are “in the money” (that is, granted at a discount) or if the options are “covered” (that is, the risk that the value of the underlying shares will decline is covered at the time of offer or until the end of the exercise period of the option, therefore granting a guaranteed benefit to the beneficiary of the option).
However, the taxation at grant does not apply in all circumstances. If the taxation at grant does not apply, taxation occurs at the time of exercise of the stock options on the difference between the fair market value of the underlying shares at the time of exercise and the exercise price. The benefit is also subject to social security contributions at the time of exercise.
No further taxes are due when the shares are sold.
Capital gains. In general, capital gains on assets that are not used for a professional activity are not taxable. However, exceptions exist for the following types of capital gains:
• Capital gains derived from speculative activities
• Capital gains derived from the sale of a Belgian corporation’s shares to a company not resident in the European Economic Area (EEA) if the individual, alone or together with his or her family, directly or indirectly owned more than 25% of the corporation’s shares at any time during the five years before the sale
The following types of income are subject to special tax rates:
• Severance payments are taxed at the average rate applicable in the last year of normal professional activity, taking into account the municipal tax (not for directors).
• Anticipated Belgian holiday pay is taxed at the average rate applicable to all income in the year of payment, taking into account the municipal tax.
• The capital accrued under life or group insurance contracts and lump-sum amounts paid instead of pensions are taxed at a rate of 10% or 16.5%, increased by the municipal tax. Tax increases may apply in the case of retirement before the age of 65 or in the case of a career of less than 45 years.
• Miscellaneous income from occasional benefits (including certain capital gains, prizes and subsidies) is taxed at a rate of 16.5% or 33%, depending on the nature of the income (the rates are increased by the municipal tax).
• Effective from 1 January 2023, a new tax regime for copyright and software rights entered into force. Copyright income remains taxed at a flat rate of 15% up to a certain amount. However, the scope of this new tax regime is very restricted and new additional thresholds are introduced. There are some transitionary rules in very specific situations. For further details, consultation with a professional adviser is necessary.
The above flat rates apply to the special items unless it is more favorable to include the income with other income taxable at the regular progressive rates.
Withholding tax. Dividends are subject to withholding tax at a rate of 30%.
Belgian-source interest is generally subject to a 30% withholding tax. Interest on regulated savings accounts in excess of the taxexempt amount is subject to a 15% withholding tax.
Royalties are considered a form of income and are subject to taxation, generally at a rate of 30%. However, the specific tax treatment of royalty income can depend on various factors, including the nature of the royalty, the residency of the recipient, and any applicable tax treaties that might reduce withholding taxes on cross-border royalty payments.
Employment income and directors’ fees are subject to a payroll tax at source by the employer. This withholding tax is creditable against the final income tax liability and any excess income tax withheld is refundable to the employee or director.
A tax on immovable property is levied on all real estate property located in Belgium. The rate of this withholding tax ranges from 1.25% to 3.97%, depending on the region where the property is located. The tax is levied on the deemed rental income of the property. The basic tax is increased by a local surcharge, depending on the municipality where the property is located.
New reporting and withholding obligations for foreign incentive plans entered into force in 2019. Belgian-related entities are required to report all remuneration paid or attributed to the beneficiaries working for the benefit of Belgian entities. Under this new measure, any remuneration attributed outside Belgium needs
to be reported by the Belgian-related entity. In addition, Belgianrelated entities must retain and remit withholding taxes on all such grants or payouts made outside Belgium. These extended reporting obligations apply to any compensation attributed as of 1 January 2019, and the new withholding tax requirements apply as of 1 March 2019.
The new reporting and withholding requirements apply not only to Belgian resident corporate entities but also to nonresident Belgian permanent establishments, even if these permanent establishments are nontaxable based on treaty considerations (for example, representation offices).
All employees or company directors working for the benefit of the Belgian affiliated entity are affected, regardless of the fact that they are bound by an employment contract with the Belgian entity. Consequently, the new requirements also apply to inbound assignees, commuters and business travelers, provided that they work for the benefit of the Belgian entity. In addition, the concept of “working for the benefit of the Belgian entity” needs to be interpreted in a broad sense, and not only in terms of a financial benefit. If the activities performed by the beneficiary belong to the normal activity or statutory purpose of the Belgian corporate entity, the individual is considered as working for the benefit for the Belgian entity.
Any kind of remuneration, not only equity-based compensation, is subject to the new reporting and withholding rules, including regular salary, bonus payments and post-departure payments such as a trailing bonus (bonus related to period of Belgian employment), equity or tax on tax payments.
Relief for losses. Losses with respect to earned income may be offset against other earned income and may be carried forward indefinitely. No carrybacks are allowed. Professional losses may not be deducted from other types of income.
B. Other taxes
Net worth tax. No net worth tax is imposed in Belgium.
Inheritance and gift taxes. The inheritance tax rate system in Belgium varies depending on the region of residence of the deceased. Substantial differences exist between the rates applied by each region. Special rules apply with respect to the transfer of a family-owned business and to the transfer of a family home to a surviving spouse, legal cohabitant or other cohabitant (except in direct line). Readers should obtain up-to-date information regarding these rules.
Under existing law, the estate of a deceased resident consists of the resident’s worldwide assets. Belgian jurisdiction over estates of deceased nonresidents is limited to the nonresidents’ real estate located in Belgium. The definition of resident for inheritance tax purposes may differ from the definition used for income tax purposes.
Inheritance taxes and gift taxes on donations of immovable property are levied according to sliding scales, depending on the beneficiary’s relationship to the deceased or donor.
social security administration accepts an extension of the homecountry standard coverage of up to five years. However, the agreement with the United States exempts employees working in Belgium from Belgian social security taxes for a period of up to seven years in exceptional circumstances.
Special rules apply to UK citizens because Brexit’s transition period ended on 31 December 2020. Depending on the start date of the international work situation, different rules apply with respect to social security. If the individual started his or her assignment or multistate work pattern on or before 31 December 2020 and if the situation continues without interruption, he or she will still enjoy the rights provided by the Regulation 883/2004 (coverage up to five years). However, if the work situation is interrupted or starts after that date, the updated rules of the Trade and Cooperation Agreement apply. Under these rules, the person can generally remain subject to the UK social security for two years only, without any extension possible.
D. Tax filing and payment procedures
Individuals must file annual tax returns reporting income received during the preceding calendar year, which is the income year. The year of filing is considered the tax year. The tax return must be completed, dated, signed and returned to the tax authorities by the date indicated on the return, unless the taxpayer obtains an extension. The official filing date is 15 July (30 June on paper), but the date is sometimes extended for resident individuals and is generally extended for nonresident individuals.
After filing, but no later than 30 June of the following year, a tax assessment or refund notice is issued. Within two months after the receipt of this assessment, the amount of tax due must be paid to the tax authorities. Any refund owed is paid within the same two-month period.
E. Double tax relief and tax treaties
Income derived by Belgian residents from a business activity performed in non-treaty jurisdictions is taxable at half the normal rate, to the extent that the income is subject to standard taxation abroad. Double tax treaties entered into by Belgium with other jurisdictions provide for the abolishment of double taxation on such income of Belgium residents through the exemption-withprogression method. Foreign-source income is exempt from tax in Belgium, but other taxable income is taxed at the rate that would apply to all taxable income if the foreign-source income were included in taxable income.
Belgium has entered into double tax treaties with the following jurisdictions.
Albania Ghana Philippines
Algeria Greece Poland
Argentina
Hong Kong
Portugal
Armenia Hungary Romania
Australia Iceland Russian
Austria
Azerbaijan
India Federation
Indonesia
Bahrain Ireland
Rwanda
San Marino
• Attending meetings in closed or limited circles for a maximum 60 working days per calendar year with a maximum of 20 consecutive calendar days per meeting. The purpose must be only to attend meetings (for example, board meetings, contract discussions with potential clients and evaluation meetings and following classroom trainings). This is only applicable in the Brussels region. The Walloon region and Flanders recently updated their legislation, which means that some categories of individuals are automatically permitted to perform their activities in Belgium, without obtaining a work authorization. These individuals must adhere to the Limosa declaration, and their activities must not exceed 90 days within a 180-day period.
• Secondment to Belgium within the framework of the provision of services by companies located in the EEA if there is compliance with “Vander Elst-requirements.” A local employment contract in an EEA country and a valid work and residence permit in the EEA “home” country concerned are required.
• Activities that must meet strict conditions, which are intragroup training for maximum of three months in the Belgian seat of the multinational group, assignment to Belgium for the initial assembly and/or the first installation of machinery, tools and similar items, and the activities of a specialized technician of a foreign company coming to Belgium to carry out urgent repair or maintenance work on machines or equipment.
If after this third immigration question, it is concluded that in view of the employment activities in Belgium no exemption from a work/single permit applies, it needs to be determined which immigration documents need to be applied for.
The time to be spent in Belgium, the activities to be performed and the actual place of employment (different rules may apply depending on the region) determine the following:
• Type of permit to be applied for
• Documents that need to be gathered
• Salary level that needs to be respected, which is the immigration salary threshold or applicable salary according to the competent joint committee
• The processing time
• The validity period of the permit
If a non-EEA/Swiss national comes to Belgium for up to 90 days (that is, a short stay), the following immigration actions need to be taken:
• Application for a work permit.
• Based on the nationality, travel is possible on the basis of the national passport (a short stay is possible for a maximum 90 days in any 180-day period in the Schengen area) or on the basis of a Schengen Visa C (required for nationals of countries listed in the European Community [EC] regulation).
• Depending on their place of stay in Belgium (hotel or not), formalities with respect to the Belgian town hall might be required (that is, declaration of arrival).
If a non-EEA/Swiss national comes to Belgium for more than 90 days, the following immigration actions need to be taken:
• An application for a single permit must be filed. The permit covers both the right to work and the right to reside in Belgium
and is open to local employees and posted workers. As a result, only one application must be filed with the regional authorities (that is, the Brussels Capital Region, Flanders or Wallonia). All documentary evidence supporting the right to work and the right to reside needs to be provided at the start of the process.
• The regional authorities verify whether the file is admissible. If yes, they transfer the “residence” part of the file to the immigration office. The regional authorities verify the “employment” part of the file, and the immigration office verifies the “residence” part. If both parties approve, a notification is provided to the employer (or the proxy holder) and competent Belgian consular authority.
• Once the authorities have agreed to issue the single permit, further steps depend on whether the worker is already in Belgium. If the person is abroad, he or she needs to apply for a Visa D via the competent Belgian consular authority before entering Belgium. Once in Belgium, the individual must register with the town hall of his or her place of residence within eight days after arrival to obtain a document called Annex 49 and to obtain the actual single permit (that is, the Belgian ID card that allows residence and employment).
Regional differences. Access to the labor market is a regional competence in Belgium. Consequently, the different regions have separate legislations and apply different immigration salary thresholds, and different formalities and conditions apply when it comes to the verifications of the file done by the region. Therefore, it is important to verify the specific regional conditions applicable to each individual case.
G. Belgian immigration for self-employed persons
Non-EEA nationals (with the exception of Swiss nationals) who are self-employed must be in the possession of a professional card. The professional card functions as a work authorization and does not automatically cover residence. A residence permit might, therefore, be needed.
Self-employed persons who reside outside of Belgium and who come to Belgium for meetings for a maximum of 90 days are exempted from the professional card requirement. This is the case, for example, for board members/directors coming to Belgium to attend to board meetings.
The professional card is generally applied for at the Belgian embassy or consulate of the applicant’s country of residence. A Visa D must then also be applied for. However, if the applicant already has a right to residence (for example, as the spouse of work permit holder), the professional card can be applied for in Belgium.
Access to certain professions is restricted in Belgium, and authorization from the competent authority is then required.
The professional card application is transferred via the competent Belgian consular authority, or the enterprise counter if the application is done in Belgium, to the regional authorities who will examine the file. Conditions to be met and procedures to follow will depend on the region in which the individual wants to