Income Tax Implications for Expatriates in Belgium

If you are getting ready to move overseas to live and work in Belgium you may want to familiarize your self with the Belgian income tax system. How your income is taxed in Belgium could have a profound affect on your living standards in the country. It is important to take into consideration the tax implications when you are evaluating an employment opportunity in the country as something that may pay a higher salary than you are used to might end up actually being less than you are used to once the taxes are taken into consideration.

In Belgium there is widely discussed nickname of the country as it being a tax haven for the rich. While it is true that Belgium is a tax haven for the rich it is also a bit of a tax burden for those that are not rich. In fact, the working people of Belgium are hit with some of what are the highest income tax rates in the entire world. After paying income taxes and social security contributions there are some Belgians that end up paying out 65 percent of their gross pay each month. The top income tax rate in Belgium is currently at 50 percent. The Belgian tax year runs from January 1^st to December 31^st.

Like in the United States, income tax in Belgium is deducted from employees' paychecks as income is earned. It is termed a "pay as you earn" basis. Employers withhold the tax amount and in turn send it in to the Belgian tax authorities on your behalf. In fact it is mandatory that all Belgian employers without income taxes, also called salary taxes, on all employees in the country.

Also like in the United States you are still required to actually file a tax return at the end of the year. You may be able to get a refund if it turns out that you have paid in too much of your salary against income taxes. If you are working in Belgium as a self employed worker then you will have to make quarterly pre-payment of your income taxes based on what you paid into the tax authorities in the previous year. If you do not make these payments or if you pay them late you can expect to be hit with a pretty stiff penalty.

The Ministry of Finance in Belgium has extensive information on the income tax system on their website. There are also local tax offices through out the country that are a good place to get any questions you may have answered. And if you are an American citizen remember that you will also have to pay income taxes in the US on your worldwide income.