Greetings expats and soon-to-be Belgian enthusiasts! Today, we’re delving into a vital aspect you must grasp before embarking on your journey to Belgium: your take-home salary. Why is this important? Well, Belgium’s tax regulations have recently undergone a transformation known as the Special Tax Regime (STR) for expatriates.
Based on rules applicable in 2024 March.
Conditions for Individuals
- Must be an Employee or Director (engaged in daily management)
- Directly recruited from abroad or assigned to Belgium
- Within the 60 months prior to commencing employment in Belgium:
- Not considered a Belgian resident taxpayer
- Not resided less than 150 km from the Belgian border
- No taxable employment income as a non-resident
- Minimum annual remuneration of 75,000 EUR (except for Inbound Researchers)
- Limited duration up to 8 years (5 + 3)
- Belgian nationals can also qualify
Conditions for Employers
- Directly recruited from abroad by:
- A Belgian company
- A Belgian establishment of a foreign company
- A Belgian or international non-profit association
- Seconded by a foreign company, part of a multinational group, to:
- A Belgian company
- A Belgian establishment of a foreign company within a multinational group
- A Belgian or international non-profit association
Now, let’s delve into the specifics of your in-hand salary, both with and without the STR.
In-Hand Salary with Granted STR
Imagine a gross salary of 100,000 Euros (inclusive of holiday pay). This would be divided into taxable and non-taxable portions, with only 30 percent deemed non-taxable. After deductions, your monthly in-hand salary would be approximately 4676.86 Euros.
In-Hand Salary without Granted STR
Without the STR, your monthly in-hand salary would be approximately 3642.20 Euros.
Benefits of STR
- Standard residency rules apply
- Employer bears certain costs related to employment in Belgium, exempted from personal income taxes and Belgian social security contributions, capped at 30% of gross remuneration, and limited to 90,000 EUR annually.
- Tax-free reimbursement of certain non-recurring expenses related to relocation, initial installation, and school fees.
Formalities to Obtain STR
- Employer must apply within three months of commencing activities in Belgium.
- Renewal application required if employment continues after initial five years.
- Employer must submit an annual list of beneficiaries by January 31 of the following year.
Transitional Measures
- New hires as of January 1, 2022, can only benefit from the new regime.
- Individuals under the old regime for less than five years in Belgium on January 1, 2022, can switch to the new regime by September 30, 2022, provided conditions are met.
- Individuals under the old regime for more than five years in Belgium on January 1, 2022, can remain under the old regime until December 31, 2023, subject to fulfillment of conditions.
Understanding your in-hand salary in Belgium entails navigating these tax intricacies. Stay informed, plan wisely, and seize the opportunities of your Belgian adventure!