Belgium has had a special tax regime for foreigners working temporarily in Belgium since 1983. As of 1 January 2022, the rules for the special regime have been modified. Under the special tax regime, foreigners can benefit from a reduction in Belgian income tax and social security contributions.
The special tax regime applies to anyone who:
1. is an employee, manager or seconded employee who:
2. is a researcher carrying out scientific research activities in Belgium.
The gross annual income limit of EUR 75 000 does not apply to researchers.
The main advantages of the special tax scheme are the exemption from income tax of 30% of the annual gross salary, up to a maximum of €90 000 per year. In addition to the income tax exemption, the employer may also reimburse the employee for the following expenses:
Expenses reimbursed to the employee under a special scheme are exempt from social security contributions.
The new special tax regime applies to all taxpayers who started working in Belgium as of 1 January 2022. Taxpayers who are subject to the old tax regime, or taxpayers who worked in Belgium before 1 January 2022, can apply for the new tax regime (if they meet the conditions) or will benefit from the old tax regime in force until 31 December 2023. A transition period from the old to the new tax regime has been set until this date. The new special tax regime can be used for 5 years with the possibility of extension for another 3 years.
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Under the old tax regime, the taxpayer was considered to be non-resident in Belgium, i.e. only income earned in Belgium was taxable here. Taxpayers using the new tax regime will have Belgian resident status (if they live in Belgium) and will therefore be taxed in Belgium on their worldwide income.
The electronic application for the special tax scheme is made by the employer via the Belgian tax office within 3 months of the employee starting work. The application must be accompanied by the employee's confirmation or consent to the application. The tax office will issue a decision within three months of the application.