Taxes in Belgium

The Belgian tax system is based on federal and local taxes. The federal taxes are the income tax, the corporate tax, the social security tax and the value added tax and they are the ones bringing the biggest income to the state budget. Regional and local taxes comprise the property withholding tax (with municipal surcharges), inheritance and gift taxes, registration duties and a few fees.

Any company operating in Belgium, as well as individuals earning an income in the country, need to comply with the special requirements for taxation. Companies also need to comply with the existing accounting principles and the filing of the annual financial statements.

The following video is a presentation of the main taxes in Belgium:

The income tax in Belgium

The personal income tax in Belgium is levied on the earned income, self-employment earnings, dividends, real estate or other properties incomes. The Belgian personal income tax applies to residents on their whole income, while for non-residents the tax applies only on the earnings they make in Belgium. However, tax exemptions exist on foreign income. The income tax rate in Belgium is applied in stages depending on the tax base, as it follows:

• –        a 25% tax applies for earnings up to EUR 16,720 (income 2026);
• –        a 40% tax rate applies for incomes between EUR 16,720 and EUR 29,510;
• –        a 45% tax rate applies for incomes between EUR 29,510 and EUR 51,070;
• –        a 50% tax rate applies for incomes over EUR 51,070;
• –        municipal surcharges (generally 0% to 9% of the tax) are added.

Residents in Belgium are taxed on their worldwide income derived from salaries and wages as well as any income derived from owning real estate, securities, and other capital investments. An individual is considered a Belgian resident if he or she has their domicile in Belgium. Non-residents only have to pay taxes on their Belgian-source income. Employees in Belgium need to pay social security contributions, of 13.07% of their gross salary. Married couples can file a joint statement but their incomes will not be aggregated. The tax year for individuals is the same as the calendar year and the deadline for filing the annual tax return is 30 June for paper returns and 15 July for online returns via MyMinfin (later for returns with self-employed income or filed by an accountant). For more details about the taxes in Belgium for individuals, our Belgian lawyers are at your disposal.

The corporate tax in Belgium

The Belgian corporate tax applies to companies that are registered or have a management board in Belgium and is applied on the company’s worldwide incomes. For incomes earned by companies in foreign countries Belgium has signed double tax treaties that allow companies to benefit from tax reductions or exemptions. The normal tax rate is 25% (the former 33% rate plus 3% surcharge, 33.99% in total, no longer applies). However, for small and medium-size enterprises (SMEs) the corporate tax can be reduced to 20% on the first EUR 100,000 of taxable profit (conditions apply).

Withholding taxes on dividends, interest and royalties apply at a normal rate of 30% (there is no withholding tax on capital gains), but deductions or exemptions apply if tax treaties are enabled. Also according to the EU parent-subsidiary directive no tax applies to a company incorporated in Belgium or in another EU country, if the company holds at least 10% of the shares for at least one year in the other company. 

Other taxes for companies in Belgium

Other taxes in Belgiumfor companies include the withholding tax on dividends and royalties, the payroll tax, the real property tax, the social security tax or the transfer tax, which applies to the transfer or lease of Belgian real estate. Belgium does not impose a branch remittance tax, nor a stamp duty tax or a technical service fees tax. VAT in Belgium also applies for the provision of certain goods and services.

The tax year in Belgium is the same as the accounting year. It can be the same as the calendar year or another period of 12 months. Tax returns should be filed at least one month following the date on which the annual general meeting of shareholders approves the financial statements. However, this cannot take place later than six months following the end of the financial year. Penalties do apply for failure to comply with the filing requirement and dates and are calculated according to an estimated annual income for the respective Belgian company.

Other taxes in Belgium

Apart from the personal income and corporate taxes, the Belgian tax system is made of other taxes such as:

• –        the real estate property tax that applies as a presumed annual rental value and varies from region to region;
• –        the social security tax that is about 25% (white-collar) or 30.57% of 108% of wages (blue-collar) for employers, plus special contributions, and 13.07% for employees;
• –        the inheritance tax that is levied at different rates depending on the region;
• –        the value added tax rate that has a standard value of 21%, but reduced rates of 12%, 6% and 0% apply on certain categories of products.

If you want to set up a company and need detailed information about the taxes in Belgium you can contact our Belgian lawyers.