A number of regulatory changes are afoot this year in Belgium. The coming months will bring the reduction of some taxes and the introduction of others. And do watch out if you take out Belgian nationality. A overview of the main changes follows:
Reduction: Corporation Tax reduces in Belgium this year from 33% to 29% and to as low as 20% for small companies employing less than 50 staff and on the first €100,000 of profits.
Introduction: Not yet here but soon to be introduced is a new tax on securities – for those with direct investments of more than €500,000. The tax is only proposed at 0.15% above this level but is an additional burden both in reporting and payment. And as the next comment illustrates, new taxes can always be increased.
Increase: Social security on pension payments by the self-employed which are over the threshold. Where gross premiums exceed €31,212 per annum (subject to indexation) social security is payable at 3%.
Reduction in bank interest exemption: Currently, interest income of maximum EUR 1,880 per annum which is derived from a traditional bank deposit account is exempt from Belgium personal tax. As of 2018, the ceiling of EUR 1,880 is reduced to EUR 940 per annum.
Increase in personal pension saving: The scope of Belgium personal tax relief for pension saving purposes will be extended as follows: individuals subject to Belgium personal tax will have the option to either invest EUR 1,200 (giving rise to a 25% tax benefit) or EUR 960 (giving rise to a 30% tax benefit) per annum. To request more information please click here.
Belgium stamp duty rates will be increased as follows:*
■ In case of share investments, the current 0.27% rate goes up to 0.35%
■ In case of bond investments, the current 0.09% rate goes up to 0.12%
*This was introduced last year on overseas investment accounts (not insurance based Br 23 investments).
Finally do be aware if you are considering Belgian nationality and if you receive or will receive a civil service pension and expect it to be covered by the Belgo/British Double Taxation Agreement (DTA). If you have a UK civil service pension and are a Belgian resident and Belgian national, that pension is taxable in Belgium and not in the UK:
As stated in the DTA:
“Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. However, such pension and other similar remuneration shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.”
For advice with any tax matters please do get in touch.