Tax Rule Offering Tax-Free Reimbursement for Expats
From January 1, 2022, Belgium has introduced a new expat tax rule offering a tax-free reimbursement of 30% of gross taxable pay for inbound taxpayers and researchers. This scheme mirrors the Dutch 30% tax rule but may offer additional benefits, such as a potential extension of the 5-year grant to three years. To qualify for the extension, expats must apply within 6 months of the end of the initial 5-year period and continue to meet Belgian tax requirements.
Eligibility Criteria and Limitations
To benefit from this tax rule, employees and directors must earn at least €75,000 in gross pay, including variable remuneration and benefits. While researchers may not need to meet this income threshold, they must dedicate at least 80% of their work to research and development, and hold either a master’s degree in a specific science discipline or have at least 10 years of relevant experience. Additionally, all expats (workers, directors, and researchers) must have had no ties to Belgium for at least 60 months before their assignment or employment in Belgium.
Annual Limitations and Benefits
The scheme offers a tax-free reimbursement of up to €90,000 per year. However, this limit might make it less attractive to high-income workers. On the positive side, moving and relocation expenses, home setup costs in Belgium, and some school fees are not subject to this €90,000 annual limit. Expats can also benefit from Belgian tax incentives and claim tax treaty protection for income taxed abroad.
Disadvantages for Belgian Tax Residents
One downside of becoming a Belgian tax resident is that your international income will be taxed in Belgium.
