New special tax regime for expatriates (Circular letter 2022/C/47): what to keep in mind?
On May 6, 2022, the Belgian tax administration has published their guidance on the new expat regime in a new Circular letter 2022/C/47 on the regulation introducing a special tax regime for incoming taxpayers and incoming researchers.
The new regime for incoming taxpayers and incoming researchers has been in force since January 1, 2022. In our previous article, you could read about the main features of this new regime. Recently, the Belgian tax administration published its Circular letter 2022/C/47 on the new status.
The guidance from the tax administration is very extensive (35 pages), but does not include many new insights into the application of the new status for incoming taxpayers/researchers.
This circular letter resumes the principles of the new regime, as they were already described in the new legislation and the Explanatory Memorandum to this law. It is however a comprehensive and clear summary of the conditions, but brings few new insights.
What makes this circular interesting, however, are some detailed examples regarding the calculation of the limit of the gross salary of 75.000 EUR that must be reached in order to benefit from the new regime. (For your information: this condition only applies to incoming taxpayers, not to researchers). The circular letter mentions that only certain and fixed bonuses may be taken into account at the initial stage.
In addition, the circular letter includes some examples of pro-rata calculations of this limit of 75.000 EUR, for example in the event that a person only starts employment during the year (or stops earlier) or is inactive for a period of time for some other reason.
According to the circular letter, the situation of part-time employment is not intended by the law. If an employee switches to part-time employment in the course of his employment, his salary for this part-time employment will still have to exceed the amount of 75.000 EUR on annual basis. If this is not the case, the special tax regime will be definitely lost.
The circular letter explicitly confirms that the 30% benefit for costs proper to the employer must be paid on top of the gross salary (of minimum 75.000 EUR), and therefore cannot be part of this salary. If the costs proper to the employer exceed this limit of 30%, the excess will qualify as taxable income (and thus subject to tax and social security contributions).
Furthermore, the circular letter describes how to apply for the new status, through which channel and which attachments are required.
The circular letter concludes with four annexes. The first annex covers the required diplomas for the incoming researchers. Annex 2 describes the form and content of the application form. The application form for the incoming taxpayers and incoming researchers can be found in respectively annex 3 and 4.
- As of January 1, 2022, a new special tax regime applies to incoming taxpayers and researchers;
- On May 6, 2022, the Belgian tax administration published its circular letter 2022/C/47;
- The circular letter contains extensive calculations examples, as additions to already known information;
- The circular letter recalls the important rules of the application in terms of application status, bort in form and content.