Further clarifications for the new inpatriate tax regime 06 05 2022
On 6 May 2022, the Belgian tax administration published practice note No. 2022/C/47 about the new expatriate tax regime for inpatriate executives and inpatriate researchers that entered into force on 1 January 2022. The extensive note must clarify some outstanding issues that were not clear.
From 1 January 2022, a new special tax regime for incoming foreign executives and researchers applies to all expatriates coming to Belgium that will phase out the existing expatriate tax regime (see Belgium Replaces Expatriate Tax Regime With Inpatriate Tax Regime (pdf). The practice note provides further clarification that is summarized below.
Minimum annual taxable salary requirement for inpatriate executives
When filing the expat tax status regime request, inbound expats (not researchers) have to prove that they earn a gross taxable salary in excess of € 75,000. Only salary items that are known and fixed when filing the application file can be taken into account. Variable payments and target bonuses are not taken into account, unless a minimum part of the variable salary will be earned continuously throughout the year (i.e. monthly pay-outs).
Furthermore, it has to be re-confirmed after the end of each income year that the taxable salary (including e.g. actual bonus pay-outs) meets the minimum taxable salary condition.
For inbound researchers, the minimum salary requirement does not apply. It clarifies in detail which researchers are eligible.
The researcher is expected to perform R&D activities exclusively. They have to spend at least 80% of their time on research activities. A small margin of 20% may be spent on administrative or management tasks such as managing a team.
Tax free relocation and installation costs
The practice note gives a limited survey of one-off relocation and installation costs that can be reimbursed without tax and social security contributions. It also contains a broad list of examples of non-qualifying relocation costs such as for storage of furniture, moving pets and losses made on the sale of a car or house.
Application and opt-in filing deadline
Expats who started work in Belgium between 1 January 2022 and 30 April 2022 must opt for the new expat regime by 31 July 2022. From 1 May 2022, the standard filing deadline will be 3 months.
Tax residency certificate of home country
Qualifying taxpayers who are not considered a tax resident under Belgian domestic tax law have to provide a certificate of tax residency issued in their home country when they apply for the new regime and thereafter on an annual basis. This certificate must indicate that they pay tax in their home country.
Change of employer
In the case of a change of employer in Belgium, the inpatriate tax regime can be continued provided all qualifying conditions are still met. A period of inactivity between two employments due to a redundancy will be accepted, but the period on inactivity will be taken into account for calculating the maximum duration of five to eight years.
Suspension of employment contract
If the employment contract is suspended, e.g. due to illness or parental leave, the €75,000 threshold is calculated on a pro rata basis if the salary is not paid during that period of suspension. It is to be noted, however, that there is no pro-rata calculation in the case the employee starts to work part-time or to work outside Belgium.
The reimbursement of recurring costs covered by the employer must be paid on top of the taxable salary and this must be set out in a contract.
The full text of practice note No. 2022/C/47 can be found here (in French) and here (in Dutch).