You’re moving to Belgium where managing your finances and paying tax will continue to be a part of your life. So what exactly do you need to know about finance and tax in Belgium?
We’ve put together an introduction guide on social security contributions, income tax, choosing a bank and VAT and how they’ll apply to you.
We aim to make sure you are one step ahead of the game. Let’s face it, you’ve enough on your plate what with your plan for European moving, negotiating a new home and possibly a job.
Scroll down to the end where we’ve given you 4 simple and practical steps to planning your Finance and Tax in Belgium
So how much do the Belgian authorities impose upon you and how will this affect you as an expat? Let’s begin with taxation.
Taxation in Belgium is one of the most excessive, amounting to more than 50% for the highest earners. Average taxation in Europe is 45%.
Doing your taxes in Belgium is complex. Most of the information is in French, Dutch or German and finding your way around the many tax codes (770 last count) can be a minefield. For an English translated version you can contact Taxpatria and download a sample form.
First, you need to know that Belgian income tax and company tax are collected at the state level, whereas the municipal authorities collect property and municipal tax.
As a resident foreigner, check out whether you can be treated as non-residents for tax purposes, where you will enjoy generous tax allowances.
The authorities will see you as a resident if your family home is in Belgium or it’s where you work.
You are classed as a resident and required to pay Belgium income tax on your worldwide income if you’re living in the country for 183 days (at least six months) of the year and registered with your local town hall.
Conversely, living in Belgium for less than 183 days (less than six months) will mean you will be taxed only on the income earned in Belgium, including capital gains and rents. However, this won’t be taken into consideration until you qualify for non-resident status.
Your tax is calculated after deductions for personal allowance, professional costs and social security contributions.
You can also work out the taxes you will pay using this online Belgian tax calculator
Belgian tax rates for 2017 are 25% for income up to €10,860 and 30% between €10,860-12,470. Salaries between €12,470 – 20,780 will pay 40% and between €20,780 – 38,080 the rate is 45%. For income over €38,080, the tax is 50%
Banking, Finance and Tax in Belgium
You’ll need your passport or Belgian eID-card along with proof of residence to open an account.
There are banks that will accept forms from your home country and let you submit evidence after you arrive in Belgium. So before the actual move, be smart, go online and open an account before even entering the country. You may even be able to open an online account as a non-resident.
Sensible to begin with your own current bank first, they’ll probably have a reciprocal arrangement or even branches themselves in Belgium.
The most popular banks are ING, BNP, Paribas Fortis and KC.
The VAT registration for businesses in Belgium is €15,000
As part of the European Union Belgium is subject to EU ruling on VAT. The EU set the minimum standard rate at 15% in January 2017. However, each state is free to set their standard rates.
At June 2017 the current rates for Belgium are as follows. This list is by no means exhaustive yet gives you a good indication:
Zero Vat for daily weekly newspapers, certain recycled materials, international transport excluding road, rail and inland waterways.
6% VAT certain foods and pharmaceuticals and disabled products, domestic transport for passengers, some books, entrance to cultural events, certain repair and renovation of private dwellings, hotel accommodation, road, rail and inland waterways, some motor vehicles and social services.
12% Some foodstuffs and agricultural supplies, some housing and construction work on new buildings, restaurants, some energy products.
21% All other taxable goods and service
Social Security is another inevitable part of your finance and tax in Belgium plan. Whether you are employed or retired, or a business owner yourself, you’ll need to pay social security if you want to access Belgian welfare benefits.
As an employee, you’ll contribute 13% from your salary and your employer will pay a further 25% on top of your salary.
So long as you’re registered with the town hall (see below) and obtained your eID card, you’ll receive many of the benefits awarded to Belgian citizens.
Check with your own social security office in your country for specific details.
For those worried about the implications of Brexit, Belgium has international social security treaties with many countries outside of the EU.
You can also visit www.socialsecurity.fgov.be
Set yourself up with your eID card
Within 8 days of arrival, take your house contract, passport size photos of you and family, and sufficient financial means and register your address with your local town hall/administration office in order to receive a Belgian national identification card known as an eID-card.
This card interacts between citizens and Belgian authorities in secure online transactions and all e-business.
As an expat, your card is known as a residency card giving you access to all the online services as afforded to Belgian citizens.
It takes about 8 weeks to obtain, hence why it’s important to sort this on arrival.
Carry it with you at all times.
It acts as your residence permit, allowing you to register for social security and obtain the all important health insurance.
As an expat, you’ll need to have state and private health insurance to access healthcare.
The good news is that Belgium has one of the best in Europe.
Make new connections with fellow expats online before you move. Use any local networks you have, including your new employer. In our experience, most people are happy to share hints and tips and shortcuts to sorting out finances and understanding the tax system.
By the way, you’ll want to check out local knowledge with your European Moving company. They’ll be able to point you in many directions. Talking of directions, you might well incur increased fuel costs due to transport/road/traffic and events.
Map out your plan with them beforehand.