In a competitive labour market, the inpatriate tax regime plays a crucial role in attracting international talents. The draft law containing various tax provisions is set to make the expat regime more appealing, with the following main changes expected to take effect for remunerations paid or attributed from 1 January 2025:
- Increased tax-free allowance: The portion of gross remuneration that can be exempted from tax 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.
These measures are designed to make Belgium’s expat regime more competitive and accessible, thereby supporting the recruitment and retention of international talent.
Since July, a further measure has been introduced to attract top profiles: employers are no longer required to pay employer social security contributions on the portion of an employee’s gross annual salary exceeding EUR 340.000.
This significant reduction in labour costs for very highly paid employees, when combined with the enhanced expat tax regime, makes Belgium an even more attractive destination for high earners and international executives.
Amendment to the Draft Law: Transitional application for entry in function in Belgium in 2025
A key amendment has been added to facilitate the transition to the new rules. Specifically, it allows individuals who started working in Belgium between 1 January 2025 and the tenth day after the publication of the law, and whose remuneration did not meet the previous EUR 75.000 threshold (but who satisfied all other conditions), to retroactively apply for the inpatriate tax regime.
In practice, eligible taxpayers will have a three-month window, starting from the tenth day after the law’s publication, to submit their application for the special regime. If approved, the regime will apply retroactively from the employment start date.
Next Steps
The draft law and its amendments are expected to be enacted soon. Employers and international employees should closely monitor the publication date and be prepared to act within the specified deadlines to benefit from the new regime. In the meantime, it is already crucial to reflect on the eligibility of the regime for profiles being recruited from abroad and strategically design the remuneration package accordingly.
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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.
