Taxation of international executives
Are there social security/social insurance taxes in Belgium? If so, what are the rates for employers and employees?
Social security taxes for the employee and employer are withheld from salary payments. The basis on which the employee social security contributions are levied is the total remuneration, including several indemnities, bonuses, and benefits-in-kind. There is no ceiling on the amount on which the contributions are levied.
|Type of insurance||Paid by employer||Paid by employee||Total|
|White collar worker||25%||13.07%||38.07%|
|Special social security contribution*|
|EUR 0 - 18,592.02||N/A||0.00%|
|EUR 18,592.02 - 21,070.96||N/A||9.00% on amounts over EUR18,592.02|
|EUR 21,070.97 - 60,161.85||N/A||EUR223.00 plus 1.30% on the amount over EUR21,070.97|
|Over EUR 60,161.85||N/A||EUR731.28|
|Total||Max. 25%||Max. 13.07% plus EUR731.28|
* This contribution does not apply if the employment income is subject to non-Belgian social security.
Residents who make gifts of real or personal property are subject to gift taxes. For some types of gifts, it is possible to avoid gift tax.
Inheritances from all inhabitants of Belgium are subject to succession duties. An inhabitant is defined as an individual who, at the time of their death, had established their domicile or seat of their fortune in Belgium.
According to inheritance law, the domicile in question is the place where the deceased have their effective residence, where they lived with their family or from where they managed the real and personal properties comprising their wealth. Inheritances of foreigners temporarily employed in Belgium who are treated as non-residents are generally subject to inheritance tax only in respect of real estate situated in Belgium.
The inheritance tax is based upon the net worth of the estate and the rate depends upon the relationship of the beneficiary to the deceased.
Different rules for determining the taxable basis and the tax rates apply according to the region in which the beneficiary is residing.
Please note that the notion of residence for inheritance taxes is different from the notion of residence in income taxes. KPMG in Belgium therefore recommends individuals assigned to Belgium to analyze their inheritance tax situation.
Gift and estate/inheritance tax rules and applicable rates depend on the region where the individual is living (Flanders, Wallonia, or Brussels).
Are there real estate taxes in Belgium?
For owned property, a so-called cadastral income will be attributed. This is the deemed rental value, taking into consideration costs of 40 percent.
An annual real estate tax, where the amount depends on the place where the house is situated, will be due.
The cadastral income of the taxpayer’s own house does, in principle, not have to be declared in the individual’s tax return.
Are there sales and/or value-added taxes in Belgium?
There exists a value-added tax on the supply of goods and services within Belgium, the importation of goods into Belgium from outside the European Community and the intra- community acquisition of goods in Belgium.
The law provides also certain exemptions.
The application of Belgian value-added tax is limited to taxable transactions that take place in Belgium.
The following VAT rates are currently in force: a rate of 0 percent, which is applicable to tobacco, newspapers, and periodicals published more than 48 times a year, and waste products (metal scrap). A reduced rate of 6 percent, which is applicable to foods and drinks; books; drugs and medicine; admission to cultural, sporting and entertainment events; hotel and camping accommodation; funeral services; service of composers and authors (copyrights); distribution of water; agricultural services; and people transport. It also applies to construction work on old buildings (under certain conditions). A reduced rate of 12 percent is applicable to social housing, food served in restaurants and margarine. The standard rate is 21 percent.
Are there unemployment taxes in Belgium?
There is no unemployment tax in Belgium.
Are there additional taxes in Belgium that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.
Municipal income taxes are determined and assessed as a percentage of the national income tax due. For resident taxpayers, this percentage is fixed by the municipal authorities and varies from community to community. For non-resident taxpayers, the municipal income tax rate is fixed at 7 percent of the national income tax due.
In addition, various other local taxes may be applicable, depending on the community where the taxpayer lives. Some examples are general inhabitant tax, garbage collection tax etc.
A separate annual tax on securities accounts is due on securities accounts held by natural persons in case the average value of the financial instruments held in the joint securities accounts held by the taxpayer is at least EUR500,000.
The tax rate is 0.15 percent on the average value of the securities account with the reference period 1 October until 30 September. The average is determined on a yearly basis using the average value of 4 reference periods per year (31 December, 31 March, 30 June and 30 September).
For Belgian resident taxpayers, the tax on securities accounts applies both to Belgian and foreign held securities accounts. For non-residents, the tax only affects securities accounts held with Belgian intermediary or financial institution.
Is there a requirement to declare/report offshore assets (e.g. foreign financial accounts, securities) to the country/jurisdiction’s fiscal or banking authorities?
Belgian resident taxpayers must communicate all non-Belgian financial accounts to the Central Point of Contact of the National Bank of Belgium (CPC). This applies to all types of financial accounts of which the taxpayer, the spouse, as well as the children (whose income is added to their parents) was a holder, at any moment during the income year with a banking, exchange, credit or savings institution located abroad.
The communication must be done before filing the resident tax return, in which the existence of a non-Belgian financial account needs to be reported as well.
All information contained in this publication is summarized by KPMG Tax and Legal Advisers, the Belgian member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The information contained in this publication is based on the Belgian Income Tax Code of 1992 and subsequent amendments; the Circular RH 624/325.294 of 8 August 1983; the Web site of the federal fiscal administrations; the Belgian Social Security Act of 29 June 1981; the Belgian Law of 30 March 1994; the Web site of the Belgium Social Security administration.
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