Belgian Income Tax

Individuals residing in Belgium are taxed on their worldwide income and non-residents only on their Belgian sourced income. Individuals are considered tax resident if their main home or centre of economic interests is in Belgium, or if they are registered in the civil register. Married persons are deemed resident in Belgium if their household is established in Belgium and, while taxed separately on their earned income, other items of income are aggregated and included in the taxable income of the spouse with the higher income.

Taxable income includes employment income, most benefits in kind, income from property, dividends, etc. Certain deductions are permissible including a lump-sum expense deduction to a maximum of EUR 3’380, although actual expenses can also be deducted, and there exists a basic allowance of EUR 6’150, as well as allowances for children.

A beneficial tax treatment applies to foreign executives and researchers employed on a temporary basis in a Belgian establishment of a non-resident company, a subsidiary of a non-resident company or in any resident company which is part of an international group. Qualifying persons benefit from a preferential tax status, their foreign-source income is exempt from tax in Belgium, and certain expenses borne by the employer such as moving costs, housing allowance, trips home, etc. These are also, within certain limits, exempt from tax for the employee. The tax authorities have to specifically grant the expatriate status to the individual.

Income tax rates start at 25% and increase to 50% for revenues over EUR 32’860. In addition to the above rates, the local municipalities may levy surcharges on the national tax at rates varying from 0% to 8.5%, with the average being 7-7.5%. Regional governments are also entitled to levy surcharges on income tax.