In addition to social security contributions and professional expenses, some non-business expenses can also be deducted from the taxable basis, and personal exemptions are granted. Contrary to most mortgage interest deduction (MID) systems3, having diminishing tax benefits over time, here the size of the deductions depends on the monthly repayment of a fixed amount over the lifetime of the loan4. Box IV is relevant for most people. For a child who is single the deduction cannot exceed €5,959 … dividends and interest. Box VIIis for the income of your investments, i.e. Belgium Tax Dbriefs. All rights reserved. Also, the secret commissions tax is not tax deductible. The first step towards understanding the Belgium tax code is … The maximum of 30% can be exceeded (up to a maximum of 50%), provided sufficient evidence of the real assistance of the helping spouse is given. 50% of representation expenses and business gifts (there are exceptions. This calculator is also intended to be quick and … Tax and Social Security Considerations . Specific procedures are in place to recover tax already paid or prepayments made in relation to the year in which the temporary exemption is claimed. The deductibility rate of automobile costs in the hands of Belgian companies (and Belgian PEs) varies in a range between 50% and 100% of the automobile costs (including the fuel costs), depending on the CO2 emission of the company car and the type of fuel. L'assujetti peut déduire la taxe dont il est redevable pour les biens qui lui ont été délivrés et les services qui lui ont été fournis, dans la mesure où il les utilise pour des opérations soumises à la TVA (ou assimilées, telles que les exportations ou les livraisons intracommunautaires). Navigate the tax, legal, and economic measures in response to COVID-19. Belgium payroll & taxation. they, among other things, follow the continuity principle from an accounting perspective). not to cover 'general' risks) that have been rendered probable by events that took place during the taxable period concerned, they are booked at the end of the financial year in one or more separate accounts on the balance sheet, they are reported on a specific form enclosed with the tax return, and. This site uses cookies to collect information about your browsing activities in order to provide you with more relevant content and promotional materials, and help us understand your interests and enhance the site. The notional interest deduction combines with the extensive treaty network concluded by Belgium, the tax regime for expatriates, the access to European Directives and the Belgian ruling practice. The Belgian government also offers a range of tax deductions which can help reduce your Belgian tax burden. 30% or 25%, respectively). The capital repayment of a mortgage loan. Deductions: travel allowance for public transport; Companies subject to Belgian CIT or Belgian non-resident CIT that make direct or indirect payments to recipients established in tax havens at the time the payment is made are obligated to declare them if they are equal to or exceed EUR 100,000 during the tax year. Belgium operates a three-year rule for gifting movable and immovable property. For Belgian tax purposes, the amortisation period, which depends on the elements included in the goodwill, is a minimum of five years, and the straight-line method must be applied. This tax-exempt reserve should be reversed in the subsequent financial year, which is the financial year in which the losses have been incurred ('the COVID year'). Please contact for general WWTS inquiries and website support. On this page: ... You live in Belgium and you are a non-resident taxpayer. As from income year 2024, the annual indexation will resume. The depreciation methods that are accepted by Belgian tax law are the straight-line method (linear method) and, in the past, the double-declining balance method. IV. Taxation in Belgium Income Tax is a progressive tax, meaning that individuals with higher wages will be taxed more than individuals with lower wages. As far as we know, Belgium is the only country with a combined deduction for interest costs and capital2. It must be stressed that the exemption takes place on the lowest part of income (at the lowest marginal tax rates). The tax year runs from 1st January to 31st December. There are no limits on certain deductions (such as DRD, innovation income deduction [IID], and the investment deduction). Payroll & Tax in Belgium. In terms of Corporate Income Tax, two beneficial regimes exist in parallel: the old Patent Income Deduction, which allows a deduction of 80% of gross income from the exploitation of patents developed or improved in Belgium, and the new Innovation Income Deduction, which allows a deduction of 85% of qualifying innovation income determined in accordance with the OECD’s … Income Tax. on the OECD ‘black list’); or. The basic personal allowance is currently 8 400 EUR which will be deducted from the total amount of taxes. That's why we have created this tool in order to help you estimate your personal income tax burdern in Belgium based on the latest data from the Belgian government. Pension savings contributions, with a maximum of EUR 990 or EUR 1,270, depending on the extent of the tax reduction (i.e. This tax deduction is available whether or not the child(ren) lives with you, and irrespective of their age, activity, marital status or place of residence, including outside of France. ANTI-TAX AVOIDANCE DIRECTIVES? Did you know that Belgium has one of the highest tax rates in Europe? The rate of gift tax varies between regions. Self-employed income only qualifies for tax if the source of that income is a Belgian employer. Some non-business expenses give rise to a tax reduction. Deductions within the basket can only be claimed up to the amount of 70% of the profits exceeding the EUR 1 million threshold. Brokerage, commissions, commercial discounts, or other payments allocated directly or indirectly to a person in the form of a Belgian public bribery. Double taxation treaties exist to help relieve a Belgian tax resident from having to pay additional income tax to another country. Charitable contributions of minimum EUR 40 (up to a maximum of 20% of net taxable income, with a maximum of EUR 397,850 for income year 2021) made to certain recognised EEA institutions give right to a 60% tax reduction. Salary. 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