The tax most associated with cross border taxation certainly is income tax.
Cross-border situations with income, assets, or family in other countries exposes you to double, or even triple, taxation.
Our first concern is to make sure that you are aware of these tax traps.
- If you live in Belgium and work in another country as an employee, a freelancer or a director of a company outside Belgium, both countries want to tax your income.
- While you are working in Belgium for a multinational, you may receive stock options or RSUs from the overseas parent company.
- And if you come to work in Belgium while your family stays at home, you may find that Belgium wants to tax your income as well.
- A particular point of interest is the special inpatriate tax regime for foreign executives and researchers.
- If you draw a state pension or an occupational pension from outside Belgium, that pension may be liable to tax in that country and in Belgium.
- Property owners with real estate in another country will face taxes there and at home.
- And investors who invest across borders face double taxation on dividends and interest.
Most countries have their own rules to mitigate double taxation, but the most important way to avoid double taxation, or sometimes triple taxation, is through the double tax treaties that Belgium has signed with almost 100 other jurisdictions. Such a dense network of double tax treaties is quite unique but double tax treaties do not eliminate all double taxation.
Understanding the Belgian tax rules and how they interact with the tax rules in other countries is the first step in avoiding double tax situations, and minimising the overall tax on your income, your assets, your family fortune, …
Where we discern double taxation issues, we help you in taking pre-emptive action to eliminate double taxation. That can be done by adapting your cross-border work situation to make a better use of the double taxation treaties, or by changing the way you hold property, or investments.
Often, double tax situations only come to light when it is too late. In this world with automatic exchange of information, there are very few secrets left. When the tax authorities come asking questions, it is often too late.