Social safety net RISE: New tax increases in Belgium will affect British expats.


EXPATS living in Belgium face a change in their tax regime as the Belgian government are set to alter this as part of their 2022 Budget.

On Tuesday, Belgium’s Prime Minister Alexander De Croo announced these tax reforms in an effort to balance the country’s budget, reports suggest. Currently, foreigners living in Belgium while on a temporary work assignment are only taxed on the days that they actually worked in Belgium.

However, after these reforms, expats will have to pay higher social security contributions.

“We are tackling an outdated tax measure,” Finance Minister Vincent Van Peteghem said.

It is estimated that the reform could yield about €35 million (around £29,683,933) for the Belgian Government.

Included in the Budget is a tax on airline tickets for flights of less than 500 kilometres.

Doctors’ notes will also no longer be needed if people in Belgium are sick for just one day.

The measures in the Budget aim to reduce the country’s budget deficit for 2022.

The proposed changes will decrease the amount from 5.4 percent to 3.1 percent.

“We have come to a very broad package of measures, with a number of very drastic decisions,” Prime Minister Alexander De Croo said.

Belgium has an attractive special tax regime for expats temporarily employed in Belgium, as set out in the Tax letter of August 8, 1983.

Under this special tax regime, expats who meet certain conditions could benefit from a reduction of Belgian income tax and social security contributions.

On February 5 2021, the competent tax authorities announced some changes were to occur, concerning the procedure and the format for the application of the special tax regime for foreign expatriates.

Currently, expats enjoy a generous expense deductible, which is part of the reason why the tax regime in Belgium is so favourable.

Expats who benefitted from the special tax status, although living in Belgium with their family, were deemed to be a non-resident for income tax purposes.

Therefore, they were only taxed on their personal and professional Belgian source income.

Their tax free allowances were exempt from taxation as they qualify (for Belgian income tax purposes) as what is known as “employers’ own costs.

These tax-free allowances are exempt from income tax up to a limit of either 11,250 € or 29,750 € per annum.

The tax-free allowances, subject to these caps, included things such as the cost-of-living allowance – for. “Brinkwire Summary News”.


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