Changes to the Belgian expat tax regime – draft law filed in parliament

Published


On December 1st, the Belgian government formally filed draft legislation in parliament regarding i.a. changes to the Belgian expat tax regime (see our heads-up article published on 15 October).  The draft legislation is very likely up for formal vote by the end of this month.

The essential characteristics of the draft legislation can be summarised as follows :

  • Separate, although in many regards identical, regime for executives and for qualifying researchers
  • Limitation in time to 5 years, with possible extension for another 3 years 
  • Open to employees and company key men directly recruited abroad or seconded to Belgium within international groups of companies
  • Open to both foreign and Belgian citizens, whether employee or company key men (except for researchers what regards the latter)
  • Required minimum gross annual taxable income of EUR 75.000 (not applicable to researchers)
  • Precondition of lack of submission to Belgian income tax in the 60 months preceding the start of professional activities in Belgium (whether as resident or as non-resident)
  • Precondition of previous place of residence more than 150 kilometres away from the Belgian border
  • Possibility for the employer / company to pay up to maximum 30 % of gross annual taxable income as tax free expense reimbursement (a payment which comes on top of the gross salary)
  • Limitation of the 30 % lump sum tax free expense reimbursement to EUR 90.000 per annum
  • Possibility for the employer / company to reimburse on top of the lump sum 30 % specific other expenses, such as moval expenses, (very) moderate installation costs and school fees
  • New regime is individual centric, not company centric (i.e. it can be continued with another employer in Belgium, provided all conditions are still met)
  • Formal request to be made by the employer / company and by the employee / company key man
  • Entry into force : 1st of January 2022
  • Expats who are less than 5 years under the current regime may (under certain conditions) still opt-in in the new regime (with an overall time limitation of 8 years) or choose to stay in the old regime
  • Fading out of (transitionary measures of) the old regime on December 31st 2023 

The draft legislation only deals with the income tax aspects.  Regrettably, no explicit exemption from Belgian social security – in particular what regards the maximum 30 % lump sum expense reimbursement – is (yet ?) included.

We’re currently working on a more elaborate memorandum which we will be happy to share with you upon request.

Although the texts are still in draft, it is expected that not much will change when it comes to the final vote in parliament.  Companies should therefore start considering their options and strategies in dealing with this new regime.  

For further information and assistance, please do not hesitate to contact Sandrine Schaumont or Philip Maertens   

 

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