Guide to Global Payroll Management

Relief from double taxes
Austria has both an income tax treaty (see Appendix A, page A-3) and a totalization
agreement (see Appendix B, page B-3) with the U.S.

BELGIUM

BELGIUM
Basis for tax
Belgian residents are taxed on their worldwide income and nonresidents are taxed on
their Belgian-source income.

Residence rules
Individuals who maintain a home and their personal assets in Belgium or who work or
conduct business there generally are considered residents. The tax residence of married
individuals is the place where the family residence is located. Individuals registered in the
"National Register" are presumed residents. Residents of foreign countries earning income in
or living in Belgium for a finite period of time can register for nonresident income tax status.
Some foreign nationals who are nonresidents for income tax purposes can qualify for special
expatriate tax treatment. This status usually applies to managers, researchers, and others
whose work is so highly specialized that recruitment of such individuals in Belgium would be
nearly impossible.

Taxable employment income
Taxable employment income subject to withholding includes salaries, wages, bonuses,
commissions, cost-of-living allowances, foreign service and housing allowances, tax equalization reimbursements, personal use of company cars, fringe benefits, employer-paid taxes,
education expense reimbursements, retirement income, and certain qualifying stock option
plans.
Special expatriate tax treatment. Certain foreign nationals residing temporarily in
Belgium are eligible to apply for special expatriate tax treatment. Those who qualify are
basically taxed only on salary or director's fees for activities performed in Belgium, with
an income exclusion for certain expatriate allowances or expense reimbursements and a
portion of employment income based on the number of days worked outside of Belgium
(capped at €11,250 for expatriates working for operating companies and €29,750 for most
expatriates but increased to €29,750 for certain foreign executives). Some foreign nationals
may also qualify for a social security tax exemption.

Tax rates
Income taxes. Income tax rates for residents range from 25% to 50% (taxable income
of: €13,440 or less: 25%; €13,440.01 - €23,720: 40%; €23,720.01 - €41,060: 45%; more
than €41,060: 50% in 2020). An additional communal (local) tax of 0% to 9% of the income
tax is imposed. Nonresidents pay a similar municipal tax at a rate of 7% of the total taxable
income. Taxable income for income tax purposes does not include social security tax payments (other than the non-tax deductible special social security contribution).
Social security taxes. Employers and employees (including foreign nationals working
for an employer located in Belgium) both make compulsory social security contributions. The
employee rate for white collar employees is generally 13.07% of gross salary (with no wage
base limitation) and the average employer rate for white collar employees is about 28% in

C-6

Guide to Global Payroll Management - 2020

Table of Contents for the Digital Edition of Guide to Global Payroll Management - 2020

Guide to Global Payroll Management - 2020 - C-6

Guide to Global Payroll Management - 2020

Table of Contents for the Digital Edition of Guide to Global Payroll Management - 2020