We refer to our previous newsflash of 22 December 2021 in which we informed you that the draft legislation regarding the changes to the Belgian expat regime was planned to be voted on in the plenary session of the Chamber at the end of December 2021. Hereby, we would like to inform you that the new expat regime has indeed been voted on 23 December 2021 and published on 31 December 2021 in the Official Gazette with entrance into force as of 1 January 2022.
Although the practical procedures still need to be clarified, and further guidance is expected in this regard by a FAQ, it can already be confirmed that the new expat tax regime, as initially foreseen, has been voted with no major changes made. We refer to our newsflash of 3 December 2021 and our Webinar dd. 18 November 2021 for the essential characteristics of the new expat regime.
For employees hired as of 1 January 2022, the new expat tax regime will apply inevitably. Expats who are on 1 January 2022 less than 5 years under the ‘old’ regime have the possibility (under certain conditions) to opt-in the new regime (with an overall time limitation of 8 years) or choose to stay under the old regime (for a transition period of 2 years, as mentioned in the parliamentary documents, in practice of course to be further confirmed by the tax authorities). This choice will have to be made by 31 July 2022 at the latest. Your client team is ready to help you out with the review of the transition measures for your current expat population.
Expats who are more than 5 years under the current regime will not be able to shift to the new expat tax regime and will still be eligible for the old special tax regime until 31 December 2023 (transition period of 2 years, as mentioned in the parliamentary documents, in practice of course to be further confirmed by the tax authorities).
Please note that the social security impact in relation to the new expat tax regime still needs to be clarified.
For further information and assistance, please do not hesitate to contact Philip Maertens or Sandrine Schaumont.