Like everyone else, expats in Belgium have to pay taxes. Here's a description of how Belgian taxes work.
Taxes you might have to pay in Belgium
Everyone who's in the country needs to pay taxes in Belgium. The type of tax you pay will depend on your residency status and whether you own a business or not.
Local taxes
There are local income taxes in Belgium. They'll range from 0 to 9%, averaging 7%. Each of the 19 Belgian municipalities set their own rates, which 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. You'll have to charge and pay for VAT if you're an entrepreneur or freelancer. VAT is "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 exceptions. For example, in food services, VAT is just 12%. Other essential 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 that you can get a refund sometimes if you charge VAT. 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), the customer will pay for it. The VAT will be what their own country charges, not Belgium. If you purchase goods from a VAT-registered business in the EU, you must pay for the VAT charges.
Investment income taxes
If interest and dividends are paid out and collected through a Belgian institution, you'll need to pay investment income taxes. You'll have to pay a flat rate of 30% on your investments. The good news is that 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, you must declare them on your annual tax return. The Belgian government will then look at the net amount and notify you of 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 in Belgium for less than six months aren't considered fiscal residents. Only their income in Belgium is taxable, including capital gains and rents. Suppose you're a legal Belgian resident who only works in Belgium temporarily. In that case, you might be able to apply for a special scheme where you only pay taxes on income you've generated in Belgium rather than on all your revenue generated in the world.
Foreigners and even Belgians receiving income anywhere other than Belgium must get information on double taxation. The good news is that Belgium has over 90 agreements with other countries, which prevent their citizens from being double taxed if they reside in Belgium. So, this is worth looking into, especially if you're considered a legal resident in Belgium.
How about non-residents in Belgium?
Non-residents in Belgium must claim:
- Any income from property assets in Belgium;
- Any benefits from Belgian establishments;
- Any profit or income from an activity undertaken on Belgian soil;
- Any income from movable property, income, pension, annuity, and allowance coming from:
- A company or organization established in Belgium,
- A Belgian establishment owned by a non-resident,
- Belgium's inhabitants,
- The Belgian state or its political branches.
Income tax scale in Belgium for individuals
There are four different income tax brackets for individuals in Belgium. The tax rate varies between 0 and 50%, depending on the individual's income. These are the numbers for the fiscal year 2023 (incomes 2022).
As you can see, Belgian income taxes are a bit higher than some other Western countries. However, everyone gets a tax-free allowance of €9,270 yearly. 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 in Belgium or 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'll owe in a given year, 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. 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
Before 2021, companies paid 29% in taxes and a 2% crisis tax. If you own a business in Belgium, you're in luck, as company taxes are much lower for 2021. This year, you'll pay 25% as the basic rate if you make over €100,000 in profit. Your rate is lowered to 20% if you earn less than that.
Tax relief and benefits in Belgium
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 an impact outside the country. They can deduct:
- Scholar fees for children in primary and secondary education;
- Part of their salary;
- Living and housing costs.
However, these foreigners temporarily working in Belgium must negotiate these exemptions with their employers and fill out the necessary papers before moving to Belgium.
To sum it up, a foreigner working temporarily in Belgium can benefit from tax relief under these conditions:
- They were hired for work 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 can 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 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 the document for the exact date.
Inhabitants from Brussels, adjacent cities, and the Walloon region receive tax returns 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, which might be at your city council.
Tax return forms must be returned on time at the tax center where you live, duly filled and signed. The date is stipulated on the form. If you cannot 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 in Belgium can pay by postal order, a crossed check, bank transfer, or installment. You can't pay taxes with a credit, debit card, or 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 to 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. To do this, you must visit a business counter ("guichet d'entreprise" in French and "ondernemingsloket" in Dutch).
Instead of waiting for a return from the tax authorities, you'll have to send income declarations 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 essential tax matters in Belgium
You may or may not run into several other kinds of taxes 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 in Belgium. 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 on 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 to 5.5%, while in Brussels, it's 3 to 40%.
If you pass away within three years of gifting something to someone, they'll also have to pay inheritance tax.
Help with tax returns in Belgium
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 when taxpayers have to fill out their forms and are 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 a certified accountant, tax accountant, or "belastingconsulent" in Dutch.
Useful links:
Europa - Income taxes in Belgium
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