Some capital gains are taxed within the income tax regime. This site uses functional cookies and external scripts to improve your experience. They usually give priority to children whose parent’s work fulltime. A hybrid mismatch is an arrangement resulting in either (a) a double deduction of expenses for both a Belgian company (or a Belgian PE) and a foreign enterprise (or establishment thereof), or (b) a deduction for one of these taxpayers and a non-inclusion in taxable income for the beneficiary (deduction … Non-resident taxpayers must also obtain the necessary forms from the Ministry of Finance, if they have not received them in time. Persons who are married or legally living together are required to file their tax return jointly except for the year of marriage, year of declaration of legal cohabitation, or if they are living separately. Will a non-resident of Belgium who, as part of their employment within a group company, is also appointed as a statutory director (i.e. Social security charges do not, therefore, form part of the tax equalization concept and reimbursement of such taxes may not be excluded. Self, spouse, or child, for treatment of a serious disease, expenses incurred on fertility treatment, or vaccination up to RM1,000 (including medical examination fees subject to a limit of MYR 1,000) 8,000: Disability-supporting equipment for the use of a disabled individual, spouse, child… An interview is organised to discuss how many days a week the child with attend and the date he or she will start at the crèche. All rights reserved. Resident taxpayers can opt to file their return electronically. Tax prepayments should be made before the following dates during the income year in order to be creditable for the respective quarters: 10 April, 10 July, 10 October, and 20 December. Belgian child benefit is paid each month, and you can get Belgian child benefit until 31 August of the year in which your child turns 18. Are the children responded to quickly if they are upset? The term tax deduction refers to any expense that can be used to reduce your taxable income. In case a withholding tax obligation exists, the employer should deduct withholding tax from the wages and transfer the withheld tax to the Belgian tax authorities by the 15th of the month following the payment of wages at the latest. In the circular, the authorities follow the current interpretation of Belgian jurisprudence. Capital losses are, in principle, not tax deductible. The withholding taxes paid can be reclaimed if reported in the income tax return, resulting in a tax benefit up to EUR243.60. Most other interests accrued in Belgium are subject to a 30 percent tax rate. Does it include food and nappies? You can also claim child benefit for adopted children or foster children. For some types of gifts, it is possible to avoid gift tax. social security). Individuals benefiting from the expatriate special income tax regime are subject to these rules as non-residents, which means that the rules only apply to Belgian-source capital gains. However, foreign real property income is exempt to non-residents. The residence situation should, however, be analyzed taking into account the Belgian residence rules (such as family situation). Qualification for the expatriate special income tax regime is not automatic, but requires the filing of a special application request by both the employer and expatriate employee within 6 months from the first day of the month following the start of employment or secondment to Belgium. These are normally taxed at source; the (Belgian) bank or the company that pays the dividend deducts 30% tax when they pay out. KPMG International provides no client services. The exempt income may be taken into account in determining the rate of tax on Belgian-sourced income (exemption with progression method). You can of course change your mind and withdraw your consent at any time, by returning to this site after clearing the cookies on your computer or device. When benefiting from the Belgian expatriate special income tax regime, the taxable income may be reduced to the extent that the expatriate spends part of their business time outside Belgium. On the other hand, capital gains resulting from such a transaction between a resident and a non-resident outside of the EEA are taxable. NOTE: These settings will only apply to the browser and device you are currently using. The tax authorities are thus adopting the economic employer approach. as a general management fee where the duties rendered as a board member is included)? The credit phases out for single parents with a modified adjusted gross income over $200,000, and … A tax deduction simply reduces the amount of income that you must pay tax on. If the actual business expenses exceed the standard business deduction, the actual expenses may be deducted. There is a tax deduction of up to EUR 11.20 per day. Amount per month:For your first child (basic amount): EUR 86.77For your second child (basic amount): EUR 160.55For your subsequent children: EUR 239.72. If the spouse/legally cohabiting partner does not work, up to 30 percent of the working spouse’s/legally cohabiting partner’s net employment income is attributable to the non- working spouse/legally cohabiting partner. KPMG International provides no client services. Tax revenue stood at 48% GDP in 2012. We want to make sure you're kept up to date. Choosing one is a serious matter, and knowing that your child is properly looked after will make a big difference to your peace of mind. 2. Member firms of the KPMG network of independent firms are affiliated with KPMG International. Failure to comply with the filing requirement might give rise to a fine and/or penalty and could also result in taxation on an estimated basis. Bonuses are paid at the end of each tax year, and accrue evenly throughout the year. Exchange rate used for calculation: USD1.00 = EUR0.8934. Income of minor children is reported on the tax return of the parents as long as they are living with their parents, unless it is business income or alimony. The excludable portion of repetitive expenses is limited to EUR11,250 per year, for expatriate personnel employed by operating companies, and to EUR29,750 per year, for expatriate personnel employed by controlling and coordinating offices or research centers. However, if you want to learn more about foreign tax … Education expenses (duly justified with invoices) for the expatriate’s children in primary or secondary schools, while repetitive in nature, are expenses that can be excluded in addition to the maximum amounts mentioned above. These moving costs cover the expenses related to moving expatriate’s personal belongings (from the home country/jurisdiction to Belgium and vice-versa), including costs for prospecting real estate in Belgium. This information is available to the Belgian tax authorities. January … However, education expenses, even though considered repetitive costs, as well as non-repetitive expenses, may be excluded without limit provided certain conditions are met. There are usually no more than 15 children in each ‘Farandoline’. However, it is not compulsory for individual resident taxpayers to report dividend income in their tax return provided it has been subject to Belgian withholding tax, which in most cases is 30 percent. Our privacy policy has been updated since the last time you logged in. The amount of income tax your employer withholds from your regular pay depends on two things: The amount you earn. You can claim child benefit in the country you are working. Full details on all areas of Belgium can be obtained from the organisations that supervise and set the national standards: Office de la Naissance et de l’Enfance (O.N.E) (French)Chaussee de Charleroi, 951060 BruxellesPh: 02 542 1211Fax: 02 542 1261Email: [email protected]Online: www.one.be, Kind en Gezin (Dutch)Hallepoortlaan, 271060 BrusselPh: 02 533 1211Fax: 02 534 1382Email: [email protected]Online: www.kindengezin.be. In the French-speaking system costs range from EUR 1.99 to EUR 28.04, depending on household income, but tax deductions of up to 70 percent are also available. If a person does not have their family home in Belgium, they will be considered as a resident if the place from where they manage their personal wealth/business/occupation is located in Belgium. Capital gains realized on portfolio investments or other personal property held for private purposes are not taxable for residents and non-residents, provided they result from the normal management of private wealth and, for portfolio investments, provided such capital gains do not result from the sale of substantial participations. member of the Board of Directors in a group company situated in Belgium) trigger a personal tax liability in Belgium, even though no separate director's fee/remuneration is paid for their duties as a board member? These organisations also have a library of books, mainly in French and Dutch but some in English and German, on childcare. The IRS Interactive Tax Assistant tool Is My Child a Qualifying Child for the Child Tax Credit? CVBA/SCRL civile) and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Resident and non-residents taxpayers are taxable on capital gains realized on assets used for business purposes. Is there a minimum frequentation period? This partially-refundable credit is intended to offset the cost of raising children. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. There is no specific separated capital gains tax in Belgium. Election to tax the unearned income of certain children at the parent’s tax rate. The following expenses are considered to be non-repetitive expenses. Are there additional capital gains tax (CGT) issues in Belgium? There are crèches in excellent state with a fully qualified staff that care for children up to three years old. A distinction is made between non-repetitive expenses and repetitive expenses. For 2018, the recently passed GOP tax reform bill doubles the amount of the Child Tax Credit … The applicable rule with respect to gift tax and gift tax rates depends on the region of Belgium where the individual is living. In principle, Belgian law provides that the employers deduct a withholding tax from salaries payable to employees as determined by prescribed tax tables. The capital gains resulting from the sale of substantial participations between two residents or between a resident and a non-resident, located within the European Economic Area (EEA), are free of taxation. Are the parents you talk to enthusiastic about the staff, and do the parents have a good relationship with them? If you live in the Netherlands and work in Belgium, you will be entitled to Belgian child benefit. All information contained in this publication is summarized by KPMG Tax and Legal Advisers, the Belgium member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on the Belgian Income Tax Code of 1992 and subsequent amendments; the Circular RH 624/325.294 of 8 August 1983; the Web site of the federal fiscal administrations; the Belgian Social Security Act of 29 June 1981; the Belgian Law of 30 March 1994; the Web site of the Belgium Social Security administration. If so, how? Each child under the age of 17 may earn you a tax credit of up to $1,000. © 2021 Copyright owned by one or more of the KPMG International entities. by: Joy Taylor. For the calculation of the hypothetical regional tax, taxpayers are deemed to be resident in the capital of their home country/jurisdiction. Please list below. Interest income is not remitted in Belgium. What categories are subject to income tax in general situations? Foreign nationals qualifying for the expatriate special income tax regime are deemed to be non-residents for income tax purposes. Principal residence gains and losses are, in principle, not taxable or tax deductible. 80 percent of alimony payments paid in pursuance of the civil code, the judicial proceedings code or the Law on legal cohabitation or in pursuance of a similar foreign law. Some were challenged in Tax Court where the taxpayer won, others are every day deductions … Tax brackets for income year 2020 are applicable to net taxable income after the deduction … You can use the Tax Withholding Estimator to estimate your 2020 income tax. The tax credit will depend on the date of the payment (the earlier the payment, the higher the credit). Social security in Belgium… The basis for determining these quarterly estimated tax payments is the estimated tax liability on projected taxable income less applicable withholding taxes and tax credits. You can also work out how much tax you will have to pay using this online Belgian tax calculator. The difference between the final tax liability and the withholding is payable or refundable within 2 months after receipt of the tax assessment. Carryback. All earned income is attributable to local sources. You can also claim child benefit from your Belgian employer’s child benefit fund or from the National Office for Child Benefit for Employees (RKW ). When you prepare and e-File your 2020 Tax Return on eFile.com, the eFile app will select any foreign credits or deductions you qualify to claim on your return based on your answers during the eFile tax interview. There is a comprehensive system of crèches, playgroups, and kindergartens in Belgium for working parents. If so, please discuss? Other income taxable to residents and non-residents (to the extent it is Belgian-sourced income) includes miscellaneous profits and a widely defined range of other sources including prizes and subsidies. Are there plenty of toys? Tax treaties concluded by Belgium alleviate the tax burden in Belgium on certain foreign income received by resident taxpayers. A global survey of income tax, social security tax rates and tax legislation impacting expatriate employees. In the event a specific double tax treaty has not been concluded, unilateral rules have been provided to reduce the burden of double taxation. For tax years 2018 and 2019, you can elect to calculate the tax on the unearned income of certain children using either the brackets and rates for estates and trusts or the parent’s tax … Your choices will not impact your visit. From 2019, the child care deduction and the child tax-free amount are replaced through the family bonus plus. Are the staffing levels always maintained? If you are in the 15% bracke t, this could save you $607.50, and those in the 25% bracket could save $1012.50. Resident taxpayers are taxable on dividend income from a Belgian or foreign-source. However, there are important restrictions. What does the cost of the crèche cover? If so, how? Children start primary school at age six. The assignee will remain non-resident as long as the conditions of residence are not fulfilled. Child Tax … The Child Tax Credit. The family bonus plus is a tax credit, which reduces the amount of tax paid. Tax returns and compliance Tax rates Residence rules Termination of residence Economic employer approach Types of taxable compensation Tax-exempt income Expatriate concessions Salary earned from working abroad Taxation of investment income and capital gains Additional capital gains tax (CGT) issues and exceptions General deductions from income Tax reimbursement methods Calculation of estimates/prepayments/withholding Relief for foreign taxes General tax credits Sample tax calculation. The tax assessment is, in principle, issued before 30 June 2 years following the income year. $2,000 child tax credit For 2020, a new baby also delivers a tax credit of up $2,000, even if the child was born late in the year. The government, in principle, issues a tax return form to each taxpayer. There is another case in which you can get extra allowance. If so, please provide a general definition of these areas. For example, Pay- As-You-Earn (PAYE), Pay-As-You-Go (PAYG), and so on. Since the last time you logged in our privacy statement has been updated. The excludable cost of education in Belgium includes tuition and registration fees, local transport, and other expenses imposed by the school, but exclude boarding expenses (food and lodging) and the cost of private lessons. The current child tax credit provides up to $2,000 per child under the age of 17. The crèche should want you to come to visit with your child, giving you an opportunity to see how things are run. If yes, what is the de minimus number of days? The taxpayer’s base salary is USD100,000 and the calculation covers 3 years. It is also possible to make quarterly estimated tax payments during the income year to reduce the final tax payment. KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity. KPMG International Cooperative (“KPMG International”) is a Swiss entity. Knowing which deductions or credits to claim can be challenging. To be clear, the child must be under 17 at the end of the year to claim the credit. This site uses functional cookies and external scripts to improve your experience. Several of the English-speaking international schools offer programmes for the pre-school age child, increasingly with an exposure to a second language. They may be borrowed free of charge. As for the crèche itself, it is advisable to inquire about the status of the crèche: Is it an authoritative, certified or subsidised institution? Do they cater for special dietary requirements? You can also get child benefit for a child ages 18 to 25 if he or she is in education or only has small income from work or receives a social security benefit. If you are already a multilingual family, might another language be too much? A $1,000 deduction, for example, might reduce your tax bill by only $150 or $200 depending on your tax bracket. In the French-speaking system costs range from EUR 1.99 to EUR 28.04, depending on household income, but tax deductions … Only the net amount of earnings derived from abroad, after deduction of the foreign taxes, is taken into account for determining the rate of taxation to be applied to the income derived from a Belgian source. Get the latest KPMG thought leadership directly to your individual personalized dashboard. There are a variety of tax credits available, each with their own specific rules of application, calculations and limitations. Are investment income and capital gains taxed in Belgium? With respect to education costs abroad, the excludable portion of education expenses incurred outside Belgium shall be determined on a case-by-case basis. The rates are as follows: Resident tax rates also apply to non-residents. Member firms of the KPMG network of independent firms are affiliated with KPMG International. Taxpayers may be able to claim the child tax credit if they have a qualifying child under the age of 17. According to the circular, the relationship between the employee and the employer is characterized by the existence of a link of subordination between the employer and the employee. Belgian residents are taxed on their worldwide earned and passive income. For example, an employee can be physically present in the country/jurisdiction for up to 60 days before the tax authorities will apply the ‘economic employer’ approach. The expatriate must be either an executive or a director of a company, or a researcher or a specialist. In principle, a resident individual must file a final tax return within 3 months of departure. However, the actual allowance paid only qualifies for exclusion to the extent permitted by prescribed guidelines. In summary, this means that if an employee is assigned to work for an entity in the host country/jurisdiction for a period of less than 183 days in the fiscal year (or a calendar year of a 12-month period), the employee remains employed by the home country/jurisdiction employer but the employee’s salary and costs are recharged to the host entity, then the host country/jurisdiction tax authority will treat the host entity as being the ‘economic employer’ and therefore the employer for the purposes of interpreting Article 15. A reduction by 50 percent of the Belgian income tax levied on foreign property income, income from personal services, and certain types of miscellaneous income, such as speculative income and alimony. The application process for state crèches should start in the fourth month of pregnancy. Taxation of investment income and capital gains, Additional capital gains tax (CGT) issues and exceptions, Calculation of estimates/prepayments/withholding, Extra allowance per child less than 3 years old (if no deductions for actual child care expenses incurred are claimed), Domestic tax rebates (dependent spouse rebate, children at charge), Total Belgian tax (excl. The NID rate for tax … Within the Belgium school system, there are kindergartens (écoles maternelles/kleuterscholen) available for children ages two-and-a-half to six years old. How do tax deductions work? The amount of taxes a person in Belgium … When are estimates/prepayments/withholding of tax due in Belgium? Does the staff look competent? The difference between the final tax liability and the withholding is payable or refundable within two months after receipt of the tax … Here’s a guide on how to enroll your child in childcare in Belgium. The current limited deduction of prior-year losses in the framework of a tax-neutral reorganisation also applies to the carried forward dividends-received deduction. (This allocation is limited to EUR11,090 on an annual basis in 2020). If the assignee receives compensation (deferred payments, bonus, deferred equity income and so on) related to the assignment in Belgium which is considered as taxable in Belgium, there will be a filing requirement. The financial contribution for official crèches in the Flemish system cost between July 2005 and June 2006 between EUR 1.31 and EUR 23.31 per day per child, depending on the net joint income of the married, co-habiting or single parent household. Application of Belgian social security contributions. If you exclude or deduct dependent care benefits provided by a dependent care benefit plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 … You will not receive KPMG subscription messages until you agree to the new policy. The maximum lump-sum deduction, or Belgian tax refund, for employees is €4,530. Standard business deductions: A standard business deduction is computed on employment income at a flat rate of 30 percent. If that is the case, you don't have to declare the interest or dividends in your tax return, b… You can claim a TOG care allowance from the SVB office in Roermond: tel. The expatriate must be temporarily employed in Belgium by an employer that is part of an international group of companies. For information and addresses contact the head office at: La Farandoline a.s.b.l.Avenue de Longueville 16, bte 51150 BrusselsPh: 02 770 8856Fax: 03 770 7327Email: [email protected]. In this case, Article 15 relief would be denied and the employee would be subject to tax in the host country/jurisdiction. Interests accrued on a regulated savings account are tax-free up to EUR990 per taxpayer. When are tax returns due? Dependent Tax Deductions. The most important thing to remember is that crèche places go very quickly, and you should reserve your place well before birth. As part of the immigration process, an individual, in principle, has to register themselves with the local commune upon arrival in Belgium and deregister themselves with the commune upon departure from Belgium. Please note that your account has not been verified - unverified account will be deleted 48 hours after initial registration. dividends and interest. The information you give your employer on Form W–4. This is a tax credit, rather than a tax deduction. The interpretation of the Belgian tax authorities of the notion employer in the framework of Article 15 of the double taxation treaties concluded by Belgium is outlined in Administrative Circular nr. Moving costs on arriving in Belgium and on leaving Belgium. Find out how KPMG's expertise can help you and your company. You can get a TOG allowance if: the child has a mental or physical handicap, lives at home, he/she is over three and under 18 years old, when you are not paid to take care of the child, and when you do not receive any other compensation that is similar to the TOG allowance. Tax equalization has been defined to include the difference between Belgium income tax and the hypothetical home country/jurisdiction federal/national, as well as other sub-federal/national level income taxes (also referred to as regional taxes) that the expatriate would have incurred if living at home. Resident taxpayers are taxed on income from real property located both in Belgium and abroad. The child and dependent care tax credit pays 20% to 35% of eligible child care expenses for qualifying families with kids under age 13. The expatriate must be a non-resident for Belgian income tax purposes. The determination of the expatriate’s country/jurisdiction of origin has a direct impact on the total amount of the tax-free allowances as the excludable expenses may only cover the cost differential between Belgium and the expatriate’s country/jurisdiction of origin. The employee may qualify for a favorable tax status. Non-resident taxpayers can also opt to file their return electronically. Spouses and legally cohabiting partners are taxed separately on all income. Lump-sum allowances or reimbursements of moving expenses that cannot be justified with invoices always are to be considered as taxable in the hands of the employee. Please note that the expenses related to the purchase of items that an expatriate might take back to their home country/jurisdiction after their assignment (furniture, home appliances, and so on) do not qualify for the exemption. Residents who make gifts of real or personal property are subject to gift taxes. Is salary earned from working abroad taxed in Belgium? The crèches are open throughout the year, usually from 7 a.m. to 6 p.m. (depending on local working hours), except on weekends and national holidays. There are also privately run pre-schools similar to American nursery schools, but the co-operative nursery school concept has currently not caught on in Belgium. This allocation, as well as federal standard personal allowances and federal tax credits, only applies for taxpayers that have at least 75 percent of their worldwide income taxable in Belgium or taxpayers that are able to claim (partial) exemptions based on a tax treaty. The tax assessment is, in principle, issued before 30 June 2 years following the income year. capital and interest payments related to a mortgage loan. Social security payments: Belgian or foreign compulsory social security payments are deductible for income tax purposes. Dividends and interest are subject to a withholding tax which is generally the final tax. Temporarily employed in Belgium KPMG thought leadership directly to Belgian child benefit such as family )... The hypothetical regional tax, taxpayers are deemed to be non-repetitive expenses you opportunity. … how do tax deductions claim can be used on a case-by-case basis claim a TOG care allowance from Ministry. Deduction of a company, or a researcher or a director of a company, tax deduction child belgium a of! The income year income, regularly granted by the expatriate tax circular of 8 August 1983 a... The information you give your employer on form W–4 net rental income after tax deduction child belgium up... 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