n Belgium, the land of chocolate, waffles and exorbitant rates of taxation, the expat tax dream is over.
This month, the country’s special expatriate tax regime — available to people hired from abroad and which was introduced in 1983 — came to an end.
From now on, only those earning over €75,000 gross (the exception is people who are researchers, for whom the threshold does not apply) per year can benefit from the special tax regime, a figure that’s out of reach for many expats — and also Belgians, who can now apply for the tax scheme.
The expats who earn under €75k have become Belgian tax residents, as opposed to non-residents living and working in Belgium. “The main consequence of being a non-resident is that you’re only taxable on your Belgian source income … now they will be taxable on foreign investment income and worldwide professional income,” said tax expert Peter Wuyts from consultancy and advisory firm BDO.
The government decided to introduce the new regime to close a legal loophole that allowed long-term residents to benefit from reductions that were intended to only apply to expats on temporary assignment. Under the new regime, those who qualify can only benefit from the reduction from five to eight years. There’s another reason the Belgian government made the move — to get more money for the state budget.
Moreover, a Luxembourg-based EU court ruled in 2023 that the tax exemptions given by Belgium to multinational companies under the old regime constitute illegal state aid, confirming a 2016 Commission decision in which Belgium was ordered to recover €700 million in unpaid taxes from 35 big companies.
