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    GMS Flash Alert

    Belgium – Guidance on Expat Tax Regime and Tax-Free Expense Allowances

    GMS Flash Alert 2022-033 | February 15, 2022

    In our 12 January 2022 report, we provided the latest update on the new legislation reforming the Belgian expatriate tax regime, which entered into force on 1 January 2022.1

    The Belgian social security authorities have now published their position on the treatment of the tax-free lump-sum expense allowances in the new expatriate tax regime.2

    The changes implemented by the law of 27 December 20213 significantly impact the tax treatment of expatriates in Belgium. The law provides that the costs proper to the employer4 which are considered tax-free are equal to 30 percent of the gross remuneration with a cap of EUR 90,000.

    Why this matters

    The position of the Belgian social security authorities is welcome news for employers and employees benefitting from the new Belgian expatriate tax regime. The transparency and unified approach created with this position should foster effective implementation of this regime and, thereby, appeal to qualified employees.

    The changes that are part of this law, now in force, will significantly impact the tax treatment of expatriates in Belgium and international assignment policies. The costs of sending expatriate employees to Belgium are likely to be affected. Global-mobility programme managers should be evaluating the impact of this change on their programmes, and may wish to consult with their global-mobility service providers.

    More Details

    The social security authorities have now confirmed their position and consider these costs proper to the employer as exempt from social security contributions.  The social security authorities hereby align their position with the tax authorities and so follow their previous position on the old Belgian expatriate tax regime in which no Belgian social security contributions were due on the tax-free allowances.

    The Royal Decree of 28 November 19695 still has to be amended in order to make this position on the exemption for social security official.

    Contacts

    Ferdy Foubert, Partner Tax and Legal Advises, KPMG in Belgium
    Ferdy Foubert

    Partner, Tax & Legal Advisers

    KPMG in Belgium

    ilse-de-mesmaeker
    Ilse De Mesmaeker

    Senior Tax Manager

    KPMG in Belgium

    Additional Resources

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    Footnotes

    1 See the new law (in Dutch) at: http://www.ejustice.just.fgov.be/eli/wet/2021/12/27/2021043625/staatsblad .

    2 See Administratieve instructies / 2021-4 (socialsecurity.be) (Dutch text) and Instructions administratives / 2021-4 (socialsecurity.be) (French text).

    3 See “27 December 2021 - Programmawet“ (fgov.be) (Dutch text) in the Moniteur Belge/Belgisch Staatsblad and LOI - WET (“27 Decembre 2021 - Loi-programme”) (fgov.be) (French text) on the e-Justice website: http://www.ejustice.just.fgov.be.)

    4 “Cost proper to the employer” is terminology used in the Belgian Income Tax Code and refers to costs are inherent/specific to the professional activity. When an employer reimburses such costs, this is not considered taxable income.

    5 28 November 1969. - Koninklijk besluit tot uitvoering van de wet van 27 juni 1969 tot herziening van de besluitwet van 28 december 1944 betreffende de maatschappelijke zekerheid der arbeiders. (fgov.be) (Dutch text) / 28 Novembre 1969. - Arrêté royal pris en exécution de la loi du 27 juin 1969 révisant l'arrêté-loi du 28 décembre 1944 concernant la sécurité sociale des travailleurs. (French text on the e-Justice website: http://www.ejustice.just.fgov.be.)  

    Disclaimer

    The information contained in this newsletter was submitted by the KPMG International member firm in Belgium.

    GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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