Belgium: Special tax regime for registered taxpayers, new rules effective 1 January 2022

Belgium has an advantageous tax regime for impatriate taxpayers offering significant advantages and reducing salary costs. A January 2022 report (French) prepared by the KPMG member firm in Belgium provides an overview of the various benefits and conditions of this regime.

In order to be able to benefit from the regime, the taxpayer must meet certain cumulative conditions:

• During the 60 months preceding entry into office in Belgium, the taxpayer cannot
  • Have been an inhabitant of Belgium
  • Have resided at a distance of less than 150 kilometers from the border
  • Have been subject to non-resident tax on professional income in Belgium
• The taxpayer must collect a gross remuneration of more than €75,000 per calendar year (subject to proration) for the services provided in Belgium (gross remuneration means remuneration before deduction of social security contributions, excluding indemnities for forfeiture, indemnities in compensation for a temporary loss of remuneration as well as reimbursements of costs specific to the employer)

There are no conditions with regard to nationality or the level of education required.

The impatriates will be subject to the classic rules of residence unless they are able to provide a certificate of residence issued by the country of origin. Expatriates will therefore have to declare their worldwide income, including investment income, in their annual Belgian tax return.

The assumption, in addition to the remuneration, by the employer, either directly or in the form of specific reimbursements, of the expenses resulting directly from the availability or the putting to work in Belgium, can be considered as a reimbursement of costs specific to the employer. This reimbursement can be made up to an amount not exceeding 30% of the remuneration and capped at €90,000 per year (subject to proration).

Certain costs are also considered as reimbursements of expenses specific to the employer, in particular when they are intended to cover:

• Moving to Belgium
• The arrangement of the home in Belgium in the first six months following arrival in Belgium
• School fees for the children of the taxpayer or the taxpayer’s partner when they are of compulsory school age

This new scheme is intended to apply for a maximum of five years, with the possibility of a three-year extension. This plan will end if, during the five years, the conditions are no longer met or if the employee sees the remuneration fall below €75,000 per year.

An electronic request must be submitted by the employer within three months of the taxpayer starting work in Belgium and, if applicable, within three months after the expiry of the first period of five years. The administration will decide within three months of receipt of the request. The taxpayer and the employer will be informed in writing of the administration's decision. In the event of a positive answer, the regime applies to the remuneration received by the expatriate taxpayer from the date of entry into service in Belgium.

Expatriates benefiting from the old regime on 31 December 2021 can opt for the application of the new regime if and only if all the conditions are met. This option can be exercised until 31 July 2022.