Last Friday, the parliament approved various important tax measures, including the changes to the special tax regime for inbound employees and researchers. While the text is yet to be published in the Official Gazette, it is essential to highlight that these changes will take effect retroactively from 1 January 2025 (except for social security purposes). This means urgent action is required from organisations and expatriates who wish to benefit from these changes.
Key Highlights of the Reform
- Increased of the expenses proper to the employer: The portion of gross remuneration that can be exempted will rise from 30% to 35%.
- Abolition of the EUR 90.000 cap: The previous ceiling on the exempted amount will be removed, allowing the 35% exemption to apply without limitation.
- Lower minimum salary threshold: The minimum gross annual salary required to qualify for the regime will be reduced from EUR 75.000 to EUR 70.000.
As noted in our previous newsletters, these changes are intended to enhance the competitiveness and accessibility of Belgium’s expat tax regime, thereby facilitating the recruitment and retention of international talent.
It is important to emphasize that these changes currently only affect the tax treatment and do not alter the social security treatment. The social security authorities have indeed confirmed that the “old” regulations, effective since 1 January 2022, will continue to apply until further notice.
Transitional Provisions for 2025 Starters
The amendments also introduce important transitional provisions. They apply retroactively (at least from a tax angle) to individuals commencing employment in Belgium from 1 January 2025, particularly those with gross salaries between EUR 70,000 and EUR 75,000, subject to other qualifying conditions. A dedicated catch-up window allows late applications within three months from the 10th day following the law’s publication in the Official Gazette.
Practical Implications and Next Steps
From a practical standpoint, the increase to 35% and removal of the EUR 90,000 cap materially impact payroll design and cost forecasting, particularly for higher earners who were previously affected by the caps. Employers should review 2025 year-end payroll runs and consider updating contractual arrangements to ensure benefitting from these important amendments.
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For more insights on this subject, please do not hesitate to reach out to your regular PwC contact, or contact Emmanuel Saporito or Bart Van den Bussche.
