Tax in Belgium
Like everyone else, expats in Belgium have to pay taxes. Here's a description of how taxes work.
Taxes you might have to pay in Belgium
Everyone who's in the country needs to pay taxes in Belgium. The type you pay will depend on your residency status and if you own a business or not.
Local taxes
There are local income taxes in Belgium. They'll range from 0-9%, with the average being 7%. Each of the 19 Belgian municipalities set their own rates, so it might differ even if you move to a neighboring city. If you're considered a non-resident, the municipalities will charge you a flat 7% and you may be charged a communal tax on your exempted foreign income (Find out more about non-residents and taxes in the next section). These local taxes are used for public services and utilities, such as trash collection and water.
VAT
VAT is the tax you pay when providing goods and services. This means if you're an entrepreneur or freelancer, you'll have to charge and pay for VAT. VAT is known as Taxe sur la Valeur Ajoutée in French (or TVA) and Belasting over de Toegevoegde Waarde in Dutch (or BTW).
The standard VAT rate is 21%, but there are definitely exceptions. For example, if you're in food services, VAT is just 12%. Other basic goods (like water, medicine, and books) have a rate of 6%. It's even possible to get a 0% rate if you deal in recycled goods and publications (either daily or weekly).
The good news is, if you charge VAT, you can get a refund on it in some cases. You might not even have to pay it in some situations. For instance, if you're dealing with another VAT-registered business in the European Union (EU), then the customer will pay for it. The VAT will be what their own country charges, not Belgium. This means that if you purchase goods from a VAT-registered business in the EU, you'll have to pay for the VAT charges.
Investment income taxes
If you have interest and dividends that are paid out and collected through a Belgian institution, then you'll need to pay investment income taxes. You'll have to pay a flat rat of 30% on your investments. The good news is, your dividend payments are exempted for the first €800. If you have money in a savings account, the tax is capped at €980. Past that, and you'll pay just 15% for taxes.
If you have interest and dividends from countries outside of Belgium, then you're required by law to declare them on your annual tax return. The Belgian government will then look at the net amount and notify you on the amount you must pay.
Foreigners (non-resident) and taxes
Belgium welcomes immigrants. Nonetheless, individuals settling in Belgium on a long-term basis need to register at their city council. This registration on the Aliens Register requires them to pay taxes in Belgium.
A foreigner living at least six months (the equivalent of 183 days) in Belgium and is registered at their local municipality has to pay taxes on all the income they receive, including money earned in other countries. Those residing less than six months in Belgium aren't considered fiscal residents. Only the income they receive in Belgium is taxable, including capital gains and rents. If you're a legal Belgian resident but are only working in Belgium temporarily, you might be able to apply for a special scheme where you only pay taxes on income you've generated in Belgian, rather than on all your income generated in the world.
Foreigners and even Belgians receiving income anywhere else than Belgium need to get information on double taxation. The good news is, Belgian has over 90 agreements with other countries which prevent their citizens from having to be double taxed if they reside in Belgium. So this is definitely worth looking into, especially if you're considered a legal resident in this country.
Income tax scale in Belgium for individuals
There are four different income tax brackets in Belgium for individuals. The tax rate varies between 0 and 50%, depending on the individual's income. These are the numbers for 2021:
- Up to €13,540 per year: 25%
- From €13,541 to €23,900 yearly: 40%
- From €23,901 to €41,360 yearly: 45%
- More than €41,361 yearly: 50%
Aso you can see, Belgian income taxes are a bit higher than some other Western countries. However, everyone gets a tax-free allowance of €8,990. If you have children, then this amount is even higher. You can also get a maximum tax refund of €4,880 as an employee.
Also, you should note that the amount you pay for income tax is not on your salary alone. It's your salary minus any mandatory social security contributions you might have, either in Belgium or in another country.
Lastly, your personal income tax (PIT) is based on both the federal PIT and the regional PIT. Some Belgian regions will charge less or more for tax liability. The amount will depend on where you were on January 1st of the tax year. If you'd like to estimate how much you're going to owe in a given year, then you can use the tax calculator from the Federale Overheidsdienst Financien. The website is only available in Dutch, French, and German. However, you can always run the text through an online translator (like Google Translate) to figure out how to work the site.
Self-employed taxation
In some countries, you're taxed differently as a self-employed person vs being an employee. However, you won't have to worry about that in Belgium. Everyone has the same tax rates for income taxes in this country, whether you're self-employed or work for an employer.
Taxation scale in Belgium for companies
Prior to 2021, companies paid 29% in taxes, in addition to a 2% crisis tax. If you own a business, then you're in luck as company taxes are much lower for 2021. For this year, you'll pay 25% as the basic rate if you make over €100,000 in profit. If you make under that, then your rate is lowered to 20%.
How about non-residents?
Non-residents must claim:
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Any income from property assets in Belgium
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Any benefits from Belgian establishments
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Any profit or income from an activity undertaken on Belgian soil
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Any income from movable property, income, pension, annuity, and allowance coming from:
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A company or organization established in Belgium
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A Belgian establishment owned by a non-resident
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Belgium's inhabitants
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The Belgian state or its political branches
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Tax relief and benefits
Some foreigners residing permanently in Belgium and working as senior executives, leaders, or experts can benefit from some tax exemptions. They have to prove their income is linked to positions outside Belgium or has impact outside of the country. They can deduct:
- Scholar fees for children in primary and secondary education
- Part of their salary
- Living and housing cost
However, these foreigners temporarily working in Belgium need to previously negotiate these exemptions with their employer and fill out the necessary papers before moving to Belgium.
To sum it up, a foreigner working on a temporary basis in Belgium can benefit from tax relief under these conditions:
- They were hired for work while outside of Belgium
- They've signed a temporary contract
- They're able to be transferred somewhere else
- They own a house outside Belgium
- They have children enrolled in international schools in Belgium or elsewhere
- They contribute or are able to contribute to social security, bonus plans, and private insurance plans in their home country
- They have a diplomatic clause in the renting agreement
Tax relief on family costs had been voted in Belgium. They are:
- €1,490 for a child
- €3,820 for two children
- €8,570 for three children
- €13,860 for four children
- €5,290 for each child after the fifth one
- €550 additionally for each child under 3
- €1,490 additionally for single-parent families
How to pay taxes in Belgium
Taxes on property and professional income are a withholding tax. The taxation year starts on January 1st and ends on December 31st. In May or June, you'll get a tax return in the mail (déclaration in French and aangifte in Dutch). You'll usually have until the end of June to mail your response but double-check on the document for the exact date.
Inhabitants from Brussels and adjacent cities, and from the Walloon region receive their tax return in French. Inhabitants in Flanders have a Dutch version. If you don't receive your tax return on time, you can contact the fiscal agency, as it might be at your city council.
Tax return forms have to be returned on time at the tax center where you live, duly filled and signed. The date is clearly stipulated on the form. If for some reason you're unable to return it on time, you can ask for a time extension before June 1st of each year. This can be done through Tax-on-Web.
Each taxpayer can pay by postal order, a crossed check, bank transfer, or installment. You can't pay taxes with a credit or debit card or by cash. For non-residents, you'll get until the end of September or October if you ask for an extension.
If you don't get your return to the tax authorities in time, then you'll be fined. In addition, they'll estimate how much you owe and require you pay that amount.
Paying taxes as a self-employed person
While you pay the same income tax rates as employed people, you won't pay income taxes in the same way as them. To be self-employed, you must register with the tax office yourself, as well as the VAT office if needed. You'll need to visit a business counter to do this (guichet d'entreprise in French and ondernemingsloket in Dutch).
Instead of waiting for a return from the tax authorities, you'll have to send declarations of income yourself. This means you'll need to carefully keep track of all the money you make and keep all receipts to back up your claims.
Other important tax matters
There are several other kinds of taxes that you may or may not run into during your time in Belgium. Here are the ones you should be aware of.
Inheritance tax
This can apply even if you're not a resident, so long as you own property. Otherwise, it's a tax you need to pay based on the total value of your estate.
Be aware that the tax rate will differ between regions in the nation. The rate you pay will be based in the area that the deceased was a tax resident in for the last five years before they passed away.
Gift tax
If you gift something of value to someone, then they'll most likely have to pay a gift tax on it. Like inheritance tax, the rate will depend on which area you're in. It can vary widely; for example, the range in Wallonia is between 3.3-5.5% while in Brussels, it's 3-40%.
If you pass away within three years of gifting something to someone, then they'll have to pay inheritance tax as well.
Help with tax returns
Because it's not always easy to fill out a tax return form, Belgium has developed specific help. Brochures explaining how to proceed are automatically sent with your tax return form.
Some specific questions may require the help of specialized agents. You can ask for help at your local taxation center; the postal address is on the tax return form. However, these professionals are available only during the period when taxpayers have to fill out their forms and they're only available for two and a half days a week.
You can also call SPF Finances (The Ministry of Finance) at (32) 2 572 57 57 (local number) from 8:00 am to 5:00 pm.
For more personalized information, we recommend that you speak to an accountant. They're known as expert-comptable or compte fiscal in French and accountant or belastingconsulent in Dutch.
Useful links:
Europa - Income taxes in Belgium
Federal Public Service Finance
