Some Frequently Asked Questions

When an expatriate is transferred from aboad to Belgium to work e.g. in one of the subsidiaries of the foreign mother company he may benefit from a special tax status implemented by the administrative Circular of August 8, 1983 that will grant him the status of a Belgian non tax resident even if he stays 10 years or more in Belgium provided he can still justify that he has maintained the centre of his social and economic interests aboad (house, relatives – but not family which generally will also be in Belgium -, savings, social activity …) which will not be the case if e.g. he buys two houses in Belgium while having none abroad.

Being granted the non-resident status by an administrative Circular this one specifies that the expatriate may not, when in Belgium, invokes the tax treaty as he would do as a Belgian tax resident.

In this context of getting a non-resident tax status the expatriate will be taxed in Belgium on his worldwide earned income and the real estate properties owned in Belgium, that’s all.
To be more specific he will not be taxed on his personal property income such as income from deposits (even put in a Belgian bank account) or dividends received abroad. He will not be taxed on any capital gain he may realized abroad or even in Belgium (this must be however slightly qualified) nor on any real estate properties he may have abroad and related income.

Regarding the taxation and in the context of a simplified picture we may say that the most fascinating advantage is that the expatriate will be excluded from his taxable basis that part of his earned income that relates to professional travels carried out
abroad meaning that if an expatriate travels 50% of his professional time he will be excluded 50% of his earned income when computing his taxable base.

Regarding the transfer of funds there is not the slightest problem in transferring funds from Belgium to abroad or the reverse except that one must than pay attention on to the law regarding money laundering in other words the expatriate must always be in a position to support the “bone fide” origin of his money when transferred in Belgium.

Any transfer of an expatriate in Belgium must be carefully analysed as the Belgian income tax rates are still appalling. In this context it's interesting to note that e.g.a French expatriate, married with two children, must, even being granted the special tax status, travel 30% of his professional time to get in Belgium a net pocket income identical to the one he had when being in France.
If the expatriate does not travel and does not work in a coordination and control office the benefit of the Circular is very narrowed as being limited to around a 5.500,00 euros tax saving

Stephen Hürner