As of January 2024, the special tax regime applicable to certain expatriates in Belgium under the administrative tolerance (i.e. Circulaire n°Ci.RH.624/325.294 dd august 08.1983) has come to an end. If you are an expatriate who was in scope of the ‘old’ special tax regime until the end of December 2023, it is crucial to understand the implications and ensure compliance with your new tax obligations.
Tax status and reporting obligations
The benefits of the ‘old’ regime have ceased, and – unless you can demonstrate that your tax residency is located outside of Belgium – you have now transitioned from an expat (non-resident for personal income tax purposes) status to a resident status in Belgium. This means that your worldwide income must be reported and taxed in Belgium, with the possibility of claiming exemptions based on tax treaties.
The deadline for filing a Belgian resident tax return is earlier compared to non-resident tax returns. Paper filings are due by 30 June, while electronic filings are due by 15 July. However, certain situations, such as electronic filing and receiving director fees or profits, extend the deadline until 16 October.
Disclosure and specific reporting obligations of foreign assets
Belgian residents have separate reporting requirements for foreign assets, a.o.:
- Foreign bank accounts should be reported to the Belgian national bank. Furthermore, these should also be disclosed in the annual resident tax return.
- Policyholders of an individual life insurance contract obtained from a foreign insurance company are required to mention it in their annual resident tax return.
- The acquisition and sale of a real estate abroad should be spontaneously reported to the authorities within 4 months of the transaction. If a non-resident taxpayer becomes a resident taxpayer, the deadline is reduced to 30 days following the first day of the taxable period. Furthermore, the (deemed or effective) immovable income should be reported in the annual resident tax return, with the possibility of claiming an exemption based on the relevant tax treaty.
- Under the so-called Cayman tax, the (Belgian resident) settlor or founder of a vehicle qualifying as a “legal construction” is required to disclose information regarding the legal construction in the annual resident tax return and potentially to report income by virtue of the look-through principle. Note that this regime has been recently modified by law, expanding its scope. We therefore strongly advise to seek assistance if you have any interest in entities that may qualify as “legal constructions” given the potential reporting and (look-through) tax implications.
Taxation on your investments
Belgian tax resident individual investors should be aware of the various rules and taxes that may apply to income generated from their investments. These include a.o. tax transparency rules, the Belgian tax on savings income (i.e. reclassification of certain capital gains as interest), the tax on stock exchange transactions, and the tax on securities accounts. It is important to note that as an investor, you bear the ultimate responsibility for declaring and paying the applicable taxes.
Key points to consider
As a resident taxpayer, there are many compliance aspects to take into account, including various declarations with their own forms and specific deadlines. It is crucial to ensure proper compliance with the tax requirements to avoid fines and sanctions.
Whether you need assistance understanding the tax implications of transitioning to a resident status, ensuring compliance with reporting obligations, or verifying the tax treatment of your assets and investments, we are here to provide the assistance you need.
