Announcement by the Belgian government to replace the current special tax status for expatriates by a new regime

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Currently, official texts are not available but we already wanted to inform you about the possible changes that are circulating ​as several sources speak about a change already as from 1 January 2022.  These measures will have implications for the employees currently benefitting from the special tax status as well as future potential foreign executives coming to Belgium.

Most likely the new specific tax regime will be limited in time for a fixed number of years (probably between 5 and 8 years). 

Under the current system, expats are deemed to be non-residents for Belgian income tax purposes. The Belgian government is however looking into the possibility of qualifying expats as Belgian residents or non-residents for tax purposes according to the normal residence rules. As resident taxpayers, they would have to declare their worldwide income in Belgium, such as foreign investment and foreign real estate income, possibly resulting in a higher tax burden in Belgium.

An element that would have a significant impact on the eligibility of the special tax status for a number of employees, is the implementation of a minimum wage level. It is likely that this minimum wage level would be substantially higher than what is required for immigration/employment purposes. 

The currently applicable travel exclusion and non-taxable allowances would be abolished and replaced by a fixed 30% deduction with a​n annual cap. It is said that it would however still be possible to reimburse certain expenses on top of the non-taxable allowances. 

It is not clear yet whether there will be a transition period or how this would look like​, but this should probably be the case.

More information?

As a client of Baker Tilly, you can contact Audrey De Bevere, Individual Tax Partner, Yves Coppens, Individual Tax Partner or your file manager.
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