Dealing with tax in Belgium while overseas can be tricky and pose complications that would demand expert guidance. Bradford Jacobs is a front-line specialist with unrivalled international taxation and payroll know-how. Over 20 years of experience in the field ensures our clients and partners comply with every aspect of taxation legislation wherever they operate. We bring global reach and local knowledge to the table – essential for foreign companies moving into Belgium, where regional differences add to the complications.
Bradford Jacobs answers all the questions surrounding Belgian payroll and the broader taxation issues. This includes personal and payroll taxes; social security contributions; consumption and indirect taxes; corporate taxes; withholding and capital gains taxes; and new tax regulations for expatriate workers. Extra complications are posed by Belgium having three legislative regions (Flanders, Wallonia and Brussels-Capital region), which have their governments and can impose their regulations. Belgium also has three official languages – French in Wallonia, Dutch in Flanders and German in East Belgium.
This is a lot to consider when building a business in the country – in addition to onboarding staff and complying with employment laws. Our breakdown of tax regulations unravels the red tape and highlights how Bradford Jacobs will assist your company in untying the knots and avoiding the hazards of taxation in Belgium! From locating the brightest talent to running your payroll, our Professional Employer Organisation (PEO) and Employer of Record (EOR) specialists will guide you every step of the way.
* Belgium’s official currency is the Euro. We give approximate US dollar equivalents but allow for exchange rate fluctuations.
Personal Income Tax (PIT):
Rates apply to residents and non-residents. Four bands start at 25% for income, reaching EUR 13,540 (USD 13,413) up to 50% for income over EUR 42,370 (USD 41,974). The first band is subject to a tax-free allowance of EUR 9,050 (USD 8,965), which can increase due to personal circumstances.
Social Insurance Taxes:
Contributions are tax deductible for employers and employees. Employees contribute 13.07% of income, with employers contributing around 27% of employees’ salaries. A special social security contribution varies between EUR 9.30 and EUR 60.94, collected monthly from net pay. The maximum annual payable amount is EUR 731.28 (USD 727).
Local Income Taxes:
Belgian residents are subject to communal taxes, up to 9%, with a flat rate of 7% for non-residents assessed on income tax due.
Corporate Income Tax (CIT):
Belgian resident companies and foreign companies’ permanent establishments in Belgium pay CIT at 25% on profits. Under the Belgian Companies and Associations Code (BCAC), qualifying companies benefit from a rate of 20% on the first €100,000 (US$99,530) of taxable profits. Insufficient advance payments can incur surcharges of 6.75%.
Indirect Taxes:
The standard rate of Value Added Tax (VAT) on goods and services is 21%. Restaurant and catering services are among the categories attracting 12%, with 6% applying to foodstuffs, some pharmaceuticals, and cultural and leisure activities. Zero-rated categories include exports, various European Union interactions and services relating to education, healthcare and social services.
Withholding Tax (WHT):
Unless exemptions apply through tax treaties, 30% applies to dividends, interest, service fees and royalties paid by Belgian corporations to foreign companies and individuals.
Capital Gains Tax (CGT):
The CIT rate of 25% applies to a company’s capital gains on the disposal of assets.
| From | Not Over | Tax % |
|---|---|---|
|
EUR 0 |
EUR 13,870 (USD 14,450) |
25% |
|
EUR 13,870 |
EUR 24,480 (USD 25,505) |
40% |
|
EUR 24,480 |
EUR 42,370 (USD 44,149) |
45% |
|
Over EUR 42,370 |
- |
50% |
Note: The first band is subject to a tax-free allowance of EUR 9,050 (USD 9,429), which can increase due to personal circumstances.
Belgium’s comprehensive social security system covers family allowances, pensions, reimbursed medical costs and illness or injuries that prevent work. Everyone is entitled to social services support from the Public Social Welfare Centre, CPAS/OCMW.
Foreigners also are entitled to specific allowances and social services, strictly dependent on residency conditions and the nature of their employment. Benefits such as family allowance, pensions and medical costs depend on agreements between Belgium and the employee’s home country and European legislation. Foreigners cannot always claim social security support to the same extent as Belgians.
Employers and employees pay into the social security funds. Contributions are based on total remuneration, including salary, bonuses and benefits in kind. For white-collar workers, the employer remits the equivalent of around 27% of the employee’s pay to the authorities. Employees contribute 13.07% of their remuneration. Allowances include:
Insurance is provided by a combination of social security contributions and insurance funds. Employees must contribute to a Belgian health insurance fund (mutuelle) as part of their social insurance contributions, but many boost this with coverage from a private fund.
For more information, download our free guide or get in touch with our consultants here