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Upcoming New Special tax regime - first insight

07/12/2021

Upcoming new special tax regime : first insight

 

The last few weeks articles, hearsay, whisperings are popping up regarding a reform of the well-known special tax regime. At this stage nothing new, it is more than 20 years that this rumour goes around. Nevertheless, 2022 could be the start point of a new era. Could be… as at the moment we are typing those words, the Budget law bargaining is still in progress.

Here is a first insight of what could be the landscape of the special tax regime as of January 1st, 2022.

But keep in mind that at this stage nothing is set in stone.

 

For which type of workers?

1st category: Employee and company director directly hired from abroad or seconded to Belgium

2d category: Researcher

 

To whose benefit?

  • A Belgian company / Belgian permanent establishment of a foreign company
  • A foreign company member of an international group
  • ** NEW** non-profit company

 

Cumulative conditions to be met by the aimed workers?

  • ** NEW** within a period of 60 months before the start date in Belgium :
    • Not having been considered as a Belgian resident (income taxpayer),
    • Nor having resided less than 150 km from the Belgian border,
    • Nor having been taxed as a non-resident on Belgian professional source income.
  • (Not applicable to researcher) **NEW** annual gross remuneration of at least 75.000,- EUR (excl. the benefit of the costs proper to the employer).
  • (For researcher ONLY) **NEW** Mandatory PhD or Scientific Master degree (such as civil engineering, applied sciences, agronomy, industrial sciences, etc..) or being able to prove a relevant professional experience of at least 10 years.

 

  • **NEW** former Belgian resident income taxpayer should not be excluded from the “new” special regime as long as the above mentioned conditions are met.

 

Amount of the costs proper to the employer / tax free allowances

Up to 30 % of the mandatory required remuneration capped at 90.000,- EUR / year.

The current application of the technical note used by the Belgian tax authorities for the computation of the tax-free allowances (capped at  11.250,- EUR) will be abolished.

Note that the costs proper to the employer are to be counted on top of the mandatory remuneration of at least 75.000,- EUR.

The methodology for the calculation of these costs proper to the employer / tax free allowances is at this stage uncertain.

(Researcher ONLY) The ceiling of 90.000,- EUR / year also apply for researchers and that even without mandatory required remuneration.

 

Additional tax free reimbursement?

Moving cost (**NEW** temporary housing limited to 3 months), school fees, relocation costs (**NEW** limited to 6 months and up to 1.500,- EUR) remain accepted.

The so-called “travel exclusion” will no longer exist in the new special tax regime.

 

For which period will the “new” special tax regime be granted?

**NEW** The new special tax regime will be limited to a period of 5 years, which may be extended to 8 years insofar that the above mentioned conditions are met.

The extension of the benefit of the “new” regime has to be requested at least 3 months after the expiration of the first period of 5 years.

 

What will happen in case of switch of employer?

**NEW** It seems that in case of switch of employer within the period of 5 years, a new application may be filed as long as the mandatory conditions for the employer and the employee are met.

 

Resident or non-resident taxpayer?

**NEW** Non-residency taxpayer status should only apply to those who would be able to prove that they remain resident taxpayer in their home country (i.e. supported by a mandatory certificate of residence).

In other words, the beneficiaries of the “new” special tax regime should be considered as Belgian resident taxpayers – taxable on their worldwide incomes but other hand also entitle to benefit from all the tax reductions they have been previously excluded of.

 

Delay to apply for the “new” special tax regime

**NEW** The application form should be introduced within the 3 months as from the employee’ start date in Belgium.

**NEW** The administration has a 3 months deadline to confirm the granting (or not) of the “new” special tax regime (to be counted as of the reception of the application).

To be noted that nothing has been foreseen in case the decision of the administration would have not been communicated or communicated after the delay of 3 months.

 

May the benefit of the “new” special tax regime be lost?

**NEW** Yes… The above mentioned conditions and most notably the mandatory minimum gross remuneration of 75.000,- EUR has to be met throughout the whole period where the “new” special tax regime is granted.

We may reasonably considered that the control will be ensured based on the annual list that the employers will have to communicate to the administration informing of their staff(s) benefiting from the “new” special tax regime.

 

As of when ? Transition period?

As of January 1st, 2022, the “new” special tax regime should apply to each worker with a start date as of January 1st, 2022.

Until December 31st, 2021 the application to the “old” regime can still be filed.

For those who already benefit from the “old” special tax regime for a period up to 5 years, they may decide to jump in the “new” regime as long as the new conditions are met. A formal request will have to be introduced by July 31st, 2022 at the latest.

At this stage, nothing has been specified in case of refusal from the Administration.

For those who prefer not to jump in the “new” regime, they will benefit of a transition period of 2 years. At the end of it, they will automatically lose the benefit of the old special tax regime and be considered as Belgian resident income taxpayer (unless they leave the Belgian territory).

***

 

Be aware that at this stage all of the above is still subject to discussion and negotiation.

We are finally drawing your attention on the fact that each personal case will have to be individually analysed. Once the law will be published, you will be personally contacted to define a tailor-made strategy for each person involved.

Be sure that we will keep you posted.

 

The IES Team

international.mobility@securex.eu

FR Select a category 07-12-2021