New Belgian tax regime for foreign executives and inbound researchers in 2022

A draft program law introducing the new tax regime for “inbound taxpayers and inbound researchers” has been submitted to the Parliament. It aims replacing the administrative circular of 1983 on the “special tax status for foreign executives in Belgium”. The intention is to align the Belgian expatriate regime more closely with the one of our neighboring countries.

You will find below the key features of the new regime based on the draft program law. Please note that these features may be subject to amendments.

Your employees and self-employed executives may benefit from this new tax regime, provided the following conditions are fulfilled:

• A minimum gross compensation threshold of EUR 75,000 (before payment of an additional lump sum “cost proper to the employer” of up to 30% and pro-rated should the employment/directorship not cover a full calendar year). The elements on which the 30% is calculated must be contractually agreed;

• During the 60 months prior to the start of the employment in Belgium the individual must:
  • have lived at least 150 kilometers away from the Belgian border; -
  • not have been considered as a Belgian tax resident; and
  • not have been subject to Belgian tax on professional income in Belgium;

• The individual must be recruited outside of Belgium;

• The employer would need to file an application within three months after the individual joins;
• The employer would be required to provide an annual listing of the beneficiaries to the tax authorities.

Belgian nationals satisfying all the above conditions may also qualify to this new regime. For qualifying researchers (“inbound researchers”) as defined in the legislation the minimum compensation threshold of EUR 75,000 would not apply.

The benefits of the new regime would be the following:

• The employer would be allowed to pay an additional tax-free cost proper to the employer of up to 30% (capped at EUR 90,000) on top of the agreed compensation;
• The social security position would be aligned with the tax exemption, however an explicit exemption of social security is not included yet in the draft bill;
• The payment of school fees and certain relocation expenses would continue to be tax exempt;
• The benefits would be available for an initial period of five years, with a possible three-year extension;
• The new regime could continue to apply even in case of a change of employer (provided all other conditions are met).

A transitional period with the existing regime would be foreseen until 31 December 2023. However the beneficiaries would have the choice to opt-in the new regime before. The benefits of the new regime compared to the existing one must be considered on a case by case basis.