Global Mobility: key updates and focus areas

This Global Mobility Services year-end flash highlights key updates and focus areas in social security, immigration, and personal income tax for internationally mobile employees.

To employ non-European Economic Area (EEA) nationals in Belgium, employers must meet specific minimum salary requirements, which vary by permit type and are updated regularly. Employers should ensure compliance by monitoring salary thresholds and budgeting for necessary increases to avoid penalties for illegal employment.

The Flemish, Brussels, and Walloon Regions have announced new salary requirements effective January 1, 2025. In the Walloon Region, the minimum gross salary for highly skilled individuals under 30 is reduced to EUR 41,290 per year, down from EUR 51,613. For employees with a Belgian contract and an EU Blue Card with less than three years of experience, the threshold is EUR 53,390, reduced from EUR 66,738.

In the Brussels Region, stricter salary criteria apply from October 2024, with only a limited list of elements considered for the minimum salary calculation. Additionally, the annual reporting obligation is waived once work authorization exceeds one year.

Belgium offers an attractive special tax regime for inbound taxpayers and researchers, providing significant benefits and reducing the cost of employment in Belgium. To qualify, several conditions must be met by both the employer and employee/director.

For inbound taxpayers, one key requirement is a gross annual remuneration exceeding EUR 75,000 for services rendered in Belgium. This salary condition does not apply to inbound researchers.

A notable benefit of this regime is that recurring expenses directly related to the individual’s employment in Belgium can be considered tax-free. These costs proper to the employer can amount to a maximum of 30% of the gross remuneration, capped at EUR 90,000 per year, and are paid in addition to the individual's gross salary.

The EUR 75,000 minimum salary requirement for inbound taxpayers must be maintained throughout their employment in Belgium, allowing tax authorities to verify compliance annually. Similarly, the recurring costs proper to the employer must adhere to the 30% limit with the EUR 90,000 cap each year.

Employers should ensure the following details are accurately reflected on the annual wage statements 281.10/20:

• Gross amount of remuneration
• Recurring costs specific to the employer
• Other costs proper to the employer (e.g., first installation costs capped at EUR 1,500, moving expenses, school fees)

We anticipate that the annual wage statements model 281.10/20 for the income year 2024 will be available in early February 2025. Employers should prepare to meet these requirements to fully leverage the benefits of the special tax regime.

When an employee is assigned to work in another country, remaining under the home state social security scheme can offer significant advantages, such as continuity of benefits and contributions.  

However, we have recently noticed that in a number of cases, these conditions were not met, resulting in the employee no longer being able to remain under the home social security system.

To qualify for this arrangement, several conditions typically need to be met:

1. Agreement: The arrangement is contingent on a bilateral or multilateral agreement between the home and host countries. These agreements outline the terms under which employees can remain under their home state social security system while working abroad.
2. Active Employment Contract: The employment contract with the home country employer must remain active throughout the entire duration of the assignment. This ensures that the employee maintains a formal and ongoing relationship with the employer, which is crucial for staying under the home state's social security system. We see countries who interpret this condition less strict and allow a suspension of the employment contract, nonetheless, the Belgian social security authorities would challenge such position.
3. Significant economic activity: the employer has significant economic activity in the home country. Mere administration is not considered an economic activity.
4. Temporary Assignment: The assignment should be temporary, usually with a predefined duration. Many agreements specify a maximum period (often up to two or five years) during which the employee can remain under the home country's social security scheme while working abroad. Also, the assignee cannot replace a current assignee.
5. Prior Coverage: The employee should have been covered under the home state social security scheme before the assignment. This establishes a baseline of contributions and benefits that can be continued during the assignment period.
6. Certificate of Coverage: The employer typically needs to obtain a certificate of coverage (or A1 document in the EEA context) from the home country's social security authority. This document serves as proof that the employee is covered under the home state scheme and exempts them from paying social security contributions in the host country.

Aligning assignment policies and agreements with these principles is crucial. By meeting these conditions, employees can maintain uninterrupted social security coverage in the home country, preserving pension rights, healthcare benefits, and other entitlements. Employers benefit by simplifying administrative processes and potentially reducing costs associated with dual contributions.