The Expat Regime in Belgium 

Belgium has been an attractive destination for a long time for expats due to its central location in Europe, high quality of life, and thriving international business environment. To make the country even more appealing to foreign workers and their employers, Belgium offers a favorable tax regime known as the “Expatriate Tax Regime” or the “Expat Regime.” This special tax scheme is designed to reduce the tax burden on highly skilled professionals coming to work in Belgium on a temporary basis. Below is a detailed overview of how the expat regime works, who qualifies, and the benefits it offers. 

Who is Eligible for the Expat Regime? 

To qualify for the expat regime, both the employee and their employer must meet specific criteria: 

• Employee Criteria: The employee must be a foreign national who was not previously a tax resident in Belgium. They must possess specialized skills, technical expertise, or a managerial role that is difficult to find in the Belgian labor market. This typically includes executives, researchers, and highly skilled professionals. 

• Employer Criteria: The employer must be either a Belgian company or a branch/subsidiary of a foreign company. Employers must demonstrate that the expat is essential to the company and that their role brings added value to the Belgian economy. 

• Temporary Stay: One of the critical conditions of the expat regime is that the employee is only in Belgium temporarily. The regime is not available for expats who plan to stay permanently or have close ties to Belgium. 

Key Benefits of the Expat Regime 

• Exclusion of Foreign Income Under the expat regime, income earned from activities performed outside Belgium is exempt from Belgian taxation. This is particularly beneficial for expats who travel frequently or manage operations in multiple countries. Only income related to work performed in Belgium is subject to Belgian taxes. 

• Tax-Free Reimbursements Certain costs that expatriates incur as part of their relocation to Belgium can be reimbursed by the employer without being subject to tax. These costs include: 

• Moving expenses to and from Belgium 

• Costs of housing in Belgium 

• School fees for children attending international schools 

• Travel expenses for family visits back home 

These reimbursements do not count as taxable income, providing significant financial relief. 

• Special Tax Allowances The regime allows expatriates to receive allowances for “costs proper to the employer” that can be tax-free up to 11,250 euros annually, or even up to 29,750 euros for certain researchers and executives. These allowances typically cover expenses such as travel, cost-of-living adjustments, and daily allowances for business trips. 

• Reduced Social Security Contributions In some cases, expats under the special regime may also be able to continue contributing to the social security system of their home country instead of the Belgian system. This option can result in lower social security costs for both the employer and the employee, depending on bilateral agreements between Belgium and the expat’s home country. 

Changes to the Expat Regime in 2022 

In January 2022, Belgium introduced significant reforms to the expat regime. The new regime replaces the previous tax system with more transparent criteria and applies to both employees and self-employed individuals. 

Some key changes include: 

• Fixed Duration: The new regime is valid for a maximum of five years, with a possible extension of three years. 

• Clear Eligibility: Expats must meet an annual gross salary threshold of at least €75,000 to qualify. 

• Administrative Simplicity: The new system is simpler to administer, with clear rules on what qualifies as tax-free allowances. 

How to Apply for the Expat Regime? 

To benefit from the expat regime, an application must be submitted to the Belgian tax authorities within three months of the expat’s arrival in Belgium. The application typically includes a detailed explanation of the employee’s role, proof of their expertise, and supporting documents from the employer. Once approved, the expat can benefit from the tax advantages for the duration of their assignment. 

Conclusion 

The Expat Regime in Belgium is a valuable tool for both employers and expats, offering significant tax breaks and financial incentives to attract top-tier talent. Are you an expat looking to move to Belgium and enjoy the tax benefit or are you an employer who would like some more info on the subject? Contact one of our TOSS coaches, they will provide you with the right contacts to make this process hassle-free.