Personal Income tax is payable by all people living and working in Belgium unless they fall under special categories such as being granted expat status by the tax authorities. This status may be granted if you are temporarily working in Belgium for your company but your centre of personal and economic interest is not in Belgium. This is only given in exceptional cases, and there is a cap of what is non-taxable starting at around 11,250€ for managers.Tax is deducted by the employer at every pay slip. The Belgian tax year is from 1 January until 31 December and taxes must be filed by 30 June the following year.
The Belgian minimum wage is currently 1,210€/month for a full-time job. Belgium uses a progressive tax method and taxes in Belgium are probably the highest in Europe going up to 53.5% for the highest contributors. Belgium does have in place agreements with around 90 governments to avoid double taxation, a list that includes most developed nations as well as many emerging nations. For more information (country list) on this and a more in-depth tax guide go to http://www.capitaltaxconsulting.com/international-tax/belgium/.
Social Security taxes of 13,07% are the first deduction from your wages and the remainder of your salary is subject to the following tax rates for 2011;
Taxable income includes:
- employment income,
- most benefits in kind,
- income from property, dividends, etc.
Certain deductions are permissible for 2011 including:
- basic tax free allowance of EUR 6,830 (if income is not over EUR 24,410),
- basic tax free allowance of EUR 6,570 (if income is between EUR 24,410 – EUR 24,670, less the difference between taxable income and EUR 23,900),
- basic tax free allowance of EUR 6,430 (if income is over EUR 24,670),
- tax free allowances for children: 1st child EUR 1,400, 2nd child EUR 2,190, 3rd child EUR 4,460; 4th child EUR 4,970,
- a maximum lump-sum expense deduction of EUR 3,670,
- dependent person allowance of EUR 1,400,
- some non-business expenses – personal exemptions are granted
Income tax rates for 2011:
- 25% for the first EUR 8,070,
- 30% from EUR 8,070 up to EUR 11,480,
- 40% from EUR 11,480 up to EUR 19,130,
- 45% from EUR 19,130 up to EUR 35,060,
- 50% over EUR 35,060.
Municipal and regional taxes are included in the tax rates above which come to around 6% and are deducted by the employer.
Taxes can be filed online in Dutch, French and German at https://eservices.minfin.fgov.be/myminfin-web/. A Belgian Identity card is required to file online. If you do not have a Belgian identity card, you can request a code to allow you to do it online from FPS Information and Technology Centre, Rue Marie-Therese 1-3, Brussels 1000, telephone 022129600 and online at http://www.fedict.belgium.be/
Please note that this is not tax advice, just a general overview of taxes in Belgium and when seeking tax advice please see the Belgian government websites (below) and registered tax-advice professionals http://www.accountancy.be/. Tax consultants are recommended, in particular for the first time you do a tax return as they will be able to advise you on the entire process as well as deductions that are allowable for your particular case.
- For more information on taxation go to http://www.kpmg.com/SiteCollectionDocuments/TIES/BELGIUM_2008_TIES.pdf
- Federal Ministry of Finance – Information on completing a tax return – Currently information is available in French, Dutch and German. The English website is under construction http://www.minfin.fgov.be/
- Invest in Belgium – Has information on corporate and individual taxes, investing in Belgium, customs, trade and labour issues. http://investinbelgium.fgov.be/
- Federal Ministry of the Economy, Self-employed and Energy – Information in French and Dutch providing a guideline for business and providing support to people wanting to start a business. http://mineco.fgov.be/