Expatriate tax ebook - Belgium

What taxes?

Capital gains tax
Inheritance, estate and gift taxes
Investment income
Local taxes
Real estate taxes
Social security taxes
Stock options
Wealth taxes
Other specific taxes

Capital gains tax
In general, capital gains are tax free in Belgium. Only capital gains on Belgian real estate (short-term assets) may be taxable under certain conditions.

Inheritance, estate & gift taxes
Inheritance tax rules and taxes differ according to the Region where the deceased had his/her fiscal residence in Belgium. Gifts are subject to gift taxes (but many exceptions can apply). Transfer taxes apply to various asset (principally property) transfers and leases at rates ranging from 0,2% to 12,5%.

Investment income
The expatriate's Belgian tax residency status will determine whether investment income such as interest, dividends etc, will become liable to Belgian income tax.

Belgian source interests are in principal subject to a withholding tax of 15%. Dividends are taxed at a rate of 25%. (or 15% under some conditions).
Expatriates qualifying for the special non resident tax status may only be taxed on Belgian source interest and dividend income.

Local taxes
Local taxes are payable as a percentage of the federal income taxes (usually 7%).

Real estate tax
A tax is levied on the annual rental value of the immovable property. The rate varies according to the region in which the property is located.

Social security taxes
Where duties are performed in Belgium, a charge to Belgian Social Security may arise. The expatiate will be treated as an employee subject to personal social security contributions of 13,07% on total gross compensation. The employer will also be required to contribute about 34% of the relevant income and benefits to Belgian social security system.

Social security contributions must be collected at source along with the payroll taxes.

Where the expatriate is transferring from a EU jurisdiction and holds the relevant documentation (A1) an exemption to Belgian Social Security will apply. ( limited in time- usually 5 years)

Where the expatriate is transferring from a jurisdiction outside the EU with which Belgium holds a Bi-Lateral Agreement and the expatriate holds the relevant documentation, an exemption to Belgian Social Security will apply. ( limited in time)

Where the expatriate is transferring from a jurisdiction that does not fall into one of the above categories, the Belgian rules will determine his liability.

Compulsory Social Security contributions are tax deductible.

Stock options
The taxable moment is at the time of “grant” of the stock options under the condition that the employee accepts the offer in writing within the sixtieth day following the offer date. The taxable benefit is at that moment determined on a lump-sum basis. The basic rule is that the taxable benefit amounts to 15% of the value of the underlying shares for an option valid for a maximum of 5 years. This percentage is increased by one percent per year started after the 5-year maturity period of the option. The percentage thus obtained can even be reduced by half if certain conditions are met. Normally, the taxable benefit is exempted from social security contributions. The capital gain realised upon exercise and sale of the shares is tax free.

When the offer of the options is not accepted within the sixty day period referred to above, taxation will occur at exercise. The taxable benefit will be determined as the possible difference between the market value of the shares at exercise and the exercise price. Social Security contributions will normally also be due. Subsequent capital gains upon sale of the shares are tax free.

Wealth tax
There is no wealth tax in Belgium.

Other specific taxes
There are no other specific taxes in Belgium.

Information about Belgium:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities