The government recently announced its plans to fundamentally reform the current tax system for foreign executives and specialists temporarily employed in Belgium, probably as from 1 January 2022. Acerta gives you a brief overview of changes based on the current bill.
Based on the current draft texts, the new Special Tax System for Incoming Taxpayers (BBIB) will be applicable to employees and company managers who meet the following conditions:
In addition to the BBIB, a Special Tax System for Incoming Researchers (BBIO) will be introduced for researchers. These "researchers" will have to have certain diplomas and/or professional experience (minimum 10 years) and be employed in a laboratory or company conducting one or more R&D programmes, but the conditions are otherwise less strict:
Only employees can be eligible for BBIO. Company directors are excluded.
The incoming taxpayer/resident researcher is required to submit an annual residence certificate from the tax administration of his/her country of residence. If he does not do so, he will be taxed in Belgium on personal income tax instead of non-resident tax.
The employer will still have to submit an application file, but now within a period of 3 months from the start of employment (6 months under the current system).
Each year, the employer will also provide a nominative list to the FPS Finance with data on the employees who benefited from the BBIB/BBIO during that year.
The application of the BBIB/BBIO is limited in time to a maximum of 5 years; in certain situations this can be extended by another 3 years. The 'new' special tax system can be retained if there is a change of employer.
30% of the employee's salary under the BBIB/BBIO - with a maximum of € 90,000 per year - will be regarded as an employer's cost.
Certain exceptional expenses (moving house, home furnishing in Belgium or school expenses) can be reimbursed tax-free by the employer, in addition to the limit of €90,000.
The introduction of the BBIB/BBIO goes hand in hand with the phasing out of the current special tax regime for foreign executives/specialists temporarily employed in Belgium.
The current special assessment system will likely continue to apply until 31 December 2023 for employees who are in the current system. As from 1/01/2024, the 'current' system will probably no longer be applicable.
An "opt in" period is provided for foreign executives/specialists temporarily employed in Belgium - provided they have benefited from this regime for less than 5 years on 1 January 2022. They may submit a final application, no later than 30 June 2022, to be covered by the new BBIB/BBIO for the remainder of the maximum period of 5 years (which may be extended by 3 years) envisaged by the BBIB/BBIO, provided that they meet the conditions of the 'new' BBIB/BBIO.
If an application is made to transfer to the BBIB/BBIO and a negative decision is reached by the Belgian tax administration, the 'current' special tax regime for foreign executives may no longer be applied. So check whether the 'new' BBIB/BBIO is complied with before submitting an application.
The loss of the 'current' special tax regime for foreign executives/specialists, temporarily employed in Belgium, has as a consequence that they become Belgian residents and will be taxed in Belgium on their worldwide income.
Are you currently considering attracting new employees from abroad, but do you have doubts about what to do in terms of applying for the status of foreign executives/specialists temporarily employed in Belgium or BBIB/BBO?
We'll provide you with some thoughts:
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