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Income tax in Belgium

An introduction



Anyone that earns an income in Belgium needs to pay taxes. How to do this, can be tricky and you can get lost in all the administration.

Income tax in Belgium is divided into 3 parts:

  • personal tax (NL: personenbelasting FR: impôt des personnes physiques);
  • company tax (NL: vennootschapsbelasting FR: impôts des sociétés);
  • corporation tax (NL: rechtspersonenbelasting FR: impôt des personnes morales).

Actually, there is a 4th category, one with different rules that apply for non-residents (NL: niet-inwoners FR: non-résident) and is called belasting van niet-inwoners (NL) impôts des non-résidents(FR).

Taxes in Belgium are paid by using a system of pre-payment. Three kinds of pre-payments (NL: voorheffing FR: précompte) exist: real estate, movables and corporate pre-payments. A normal tax year starts on January 1 and ends on December 31.

Taxes on your salary are withheld by your employer on a ‘pay as you earn’ basis (PAYE). This means that every month a certain percentage will be withheld from your pay-check and be sent to the government. So it’s your employer that’s responsible for paying those taxes.

Rate

The rate can differ from 25% to 52%, making Belgium one of the countries with the highest tax rate in Europe. In the table below, you can find the tax rates for income that was generated in 2007 and 2008:

Rates

Income 2007

Income 2008

25 %

0 - € 7,420

0 - € 7,560

30%

€ 7,420 - € 10,570

€ 7,560 - € 10,760

40 %

€ 10,570 - € 17,610

€ 10,760 - € 17,920

45 %

€ 17,610 - € 32,270

€ 17,920 - € 32,860

50 %

> € 32,270

> € 32,860

Spouses

Married individuals need to provide a joint tax return and they will be taxed together. This also applies for people who are legally living together.

Dependants

The following categories of people can be classified as dependent (NL: ten laste FR: à charge) on someone who is liable to pay tax:

  • the taxpayer’s children, adopted children, grandchildren and great-grandchildren;
  • children that are fully or primarily dependant on him (e.g. children who’s parents have been deprived of parental authority);
  • parents and/or grandparents, etc.;
  • brothers and sisters;
  • people who he was dependent on in his childhood.

Note that a spouse or live-in partner can never be seen as dependants.

More information can be found on the website of the Belgian government (www.belgium.be ), the website of the Federal Public Service Finance (www.minfin.fgov.be ) or the website of the Federal Tax Administration (www.fiscus.fgov.be ).


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