Although, there are many reasons why Belgium is "a little paradise", it is certainly not a tax haven for the ordinary worker. As in most countries you will be required to pay taxes locally. Stay informed to know how your income will be taxed.

How does taxation work in Belgium?

Taxation in Belgium for residents

In Belgium, you are liable to pay Belgian income tax as soon as you are considered a Belgian tax resident, regardless of which region you live in. To be considered a Belgian tax resident, you must meet three criteria:

  1. Your permanent home must be in Belgium.
  2. You are living in Belgium for at least six months per year.
  3. The majority of your income is generated in Belgium.

Taxation in Belgium for non-residents

If you are not a resident of Belgium, you must notify the competent tax office by filling out a form. You will find this document on the website of FPS Finance. Under certain conditions (for example for executives or researchers), taxation of expatriates may be revised downwards. It is therefore sometimes possible to benefit from a preferential tax regime.

Different taxable income

A. There are different types of taxable income. The first, the professional income, is taxed as follows:

  • Tax rates for individuals

Table of tax brackets for the tax year 2017 (income year 2016)

Up until EUR 10,86025%
From EUR 10,860 to EUR 12,47030%
From EUR 12,470 to EUR 20.78040%
From EUR 20,780 to EUR 38,080 45%
From EUR 38,08050%

  • Tax rates for corporations
The corporate tax system is different. Any company whose principal office is established in Belgium is liable to tax. In general, taxes amount to 29,58% (25% as from 2020) of any profit-making operation. However, a small company can benefit of a lower tax rate of 20,40% (20% as from 2020) on the first profit of € 100.000.

Do you own a company and do you want it to pay less taxes? On this website, professor Herman de Cnijf reveals how to do so.

In addition to the tax on professional income, tax is also levied on:

  • property income;
  • investment income (includes among others income from bank accounts, stocks or bonds);
  • maintenance allowances;
  • Benefits of any kind (benefits offered for free or at a reduced price by the employer, as well as company cars);
  • more information on the FPS Finance website.

When and how to pay taxes

If you are employed, your employer will deduct a certain amount directly from your monthly salary. This amount is called withholding tax and constitutes an advance on your taxes. In late June, you must complete a tax return to determine whether you still owe a certain amount or if you are owed by the tax office. This calculation is based on the net amount, after you have paid social contributions to your insurance and professional fees. To help you complete your return, your employer will send you a card with all your income to declare. Do you want to get ahead of your payment to avoid unpleasant surprises at the end of the year? This is possible thanks to advance payments. Attention: freelancers and companies are obliged to make advance payments on a quarterly basis if they do not want to be subject to a tax surcharge. The tax return comes in two formats:

  • Paper return: If you are considered a Belgian resident you will receive a paper statement by mail accompanied by brochures and a preparatory document that will serve as a draft. Fill out the draft to find out how much you need to include in the original document. Finally, sign the statement and send it to the scanning centre.
  • Tax-on-web: Tax-on-web is the online service for individual income tax. This service offers several advantages such as pre-filled information, assistance with filling out documents and faster processing of your return.

Good to know

The municipal tax in Belgium is a tax from the Brussels municipalities which comes on top of individual taxes. Find more details on the FPS Finance website.

Belgian taxation and European officials: community tax

European officials are subject to a special tax regime. The employees of the European Union either pay taxes in their home country or in Belgium. However, contrary to what is sometimes said, they are not tax exempt! All EU staff not paying individual tax, are liable to pay community tax, which is deducted at the source and immediately returned to the overall EU budget. This levy is calculated based on the income bracket of the employee and ranges from 8 to 45%.