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Tax law for expats in Belgium

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Foreign executives (so-called expatriates or expats) who work temporarily in Belgium for a Belgian company or a Belgian branch of a foreign company can benefit from a special, favourable tax status in Belgium: the expat status. This status applies to two categories of taxpayers: on the one hand, employees and executives of companies and, on the other, personnel working as researchers.
 
If you work in Belgium as an employee, your salary is taxed as part of income tax. In principle, all natural persons resident in Belgium are liable to income tax, but there is also a limited tax liability for natural persons who are not resident in Belgium but who earn income there. Exceptions are regulated in the applicable double taxation agreement (DTA).
 
Income tax in Belgium is subject to a progressive tax rate, meaning that the amount payable depends on the amount of taxable income. A basic tax-free allowance is deducted from taxable income. Income above this basic allowance is taxable, although various deductions and allowances are available. Individuals are required to file a tax return by the end of the calendar year. Belgium (rightly) has a reputation for relatively high income tax. It is therefore advisable to assess whether the more favourable expat status could apply to your personal circumstances.

What are the requirements for expat status?

In order to benefit from expat status, a number of conditions must be met. The expatriate must in the 60 months prior to being hired in Belgium:

  • not have lived in Belgium,
  • not have lived within 150 kilometres of the Belgian border,
  • not have been subject to tax on professional income in Belgium.

In addition, the expatriate must receive an annual gross salary of at least €75,000 for services rendered in Belgium. This income requirement does not apply to researchers, who must, however, provide proof of a qualified Master’s degree or at least 10 years of professional experience. In addition, they must spend at least 80% of their working time on research for the company.

How to apply for expat status?

The expat status must be applied for electronically by the employer at the FPS (FOD Financiën) Finance. The application must be submitted within 3 months of the expatriate being hired in Belgium.
If the application is approved, the expatriate status can be used for a maximum of 5 years, with the possibility of a one-time extension of 3 years.

What are the advantages of expat status?

The special status has two important tax advantages:

  • 1.The expatriate can receive up to 30% of their gross annual salary as an expense allowance (net). This amount is limited to EUR 90.000 per year. No supporting documents are required for this allowance.
  • 2.In addition, the employer can reimburse the expatriate for the following costs, provided the relevant receipts are submitted:
    • Relocation costs to Belgium
    • Costs for furnishing the flat in Belgium
    • School costs for the children in Belgium


Social security follows the opinion of the tax authorities, so that these remunerations are also exempt from social security contributions.

Conclusion

It is therefore worth applying for expatriate status if you or your employee qualify. Our tax and employment lawyers can advise you on the requirements for expatriate status and assist you with the application process.

Contact

Do you have any questions?

Would you like to apply for expat status in Belgium? Then please contact our expat specialist Marco Wirtz. By e-mail to m.wirtz@euregio.law or by telephone on +32 11 29 47 01.

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