To attract foreign investors, Belgium set up in 1983, via an administrative circular, a special tax regime allowing foreign expatriates to benefit from relatively attractive taxation. Subject to compliance with a series of conditions, the expatriates concerned, although working and living in Belgium sometimes even with their families, kept their tax residence in their country of origin so that they were only taxed on their income. private and professional from Belgian sources. The part of the salary corresponding to travel days and days worked abroad as well as foreign private income generally remained taxable in their country of origin and were exempt from tax in Belgium. The same was true for a series of allowances granted to them by their employers on the very reason of expatriation (housing allowance, cost of living allowance aimed at erasing the difference in the cost of living between Belgium and country of origin, etc.). Such allowances were exempt from tax up to a ceiling of 11,250 or 29,750 euros per year and were also exempt from social security contributions.
The success of this regime has never been denied. It is true that the grant conditions were very flexible and that its application was unlimited in time. It is in particular this observation as well as the cost of the measure which led the legislator to change the rules and to adopt new provisions which entered into force on January 1, 2022 and which are now commented on in a long and voluminous circular published on May 6 (circular 2022/C/47).
Minimum remuneration
This circular, the purpose of which is to clarify certain points that the law has not sufficiently specified, provides clarifications on the new conditions of application of this scheme and, in particular, that relating to the minimum remuneration which is now applicable. Indeed, to be able to benefit from the new special tax regime, the taxpayers concerned must now collect a remuneration of more than 75,000 euros per calendar year in relation to the services provided in Belgium, which was not the case previously.
In this respect, the circular confirms, with a supporting example, that the remuneration threshold is assessed at the time of the submission of the request to benefit from the scheme but also throughout the period of application of the scheme. It follows that the scheme ceases to be applicable if the threshold of 75,000 euros is no longer reached, which might happen, comments the circular, in the event of a change from full-time to part-time employment. .
Gratifications
It also specifies that the remuneration which must be taken into account for the calculation of the remuneration threshold includes the gross remuneration for the services provided in Belgium, before deduction of social security contributions, excluding compensation for forfeiture, compensation in compensation for a temporary loss of remuneration and exempt remuneration.
The circular provides, moreover, that the gross remuneration mentioned above for the services provided in Belgium is understood to mean the certain and fixed gross annual remuneration at the time of the introduction of the application for application of the scheme.
Bonuses and other gratuities whose attribution is not certain are therefore excluded. These include, for example, bonuses linked to sales objectives not yet achieved. On the other hand, all bonuses or all other gratuities whose attribution is certain and which are therefore not linked to a future condition are taken into account.
Finally, it is specified in the circular that the remuneration threshold is reviewed in the light of the gross remuneration actually obtained for the services provided in Belgium and that in all cases, the evaluation takes place at the end of each year during which the scheme was applied.
Although commented on in the circular, the minimum remuneration condition of 75,000 euros does not bode well for expatriates from smaller foreign companies wishing to invest in Belgium, which will not always be able to provide their expatriates with such a level of remuneration.