Revision of the current Belgian special tax regime

The Belgian Government has announced a revision of the current Belgian Special Tax Regime for Foreign Executives in its recently published budgetary measures.

In general, the intention is to align the Belgian special regime with the Dutch 30%-rule. Moreover, the current benefits (i.e. the tax free nature of certain allowances and the so called travel exclusion) would no longer apply and access to the special regime is expected to be limited to certain executives and specialists.

Although no official texts are yet available, it seems that the most significant amendments will most likely be:

residency status: beneficiaries of the new special tax regime will most likely be considered resident tax payers (vs. non-resident under the current system);
duration: the expectation is that the benefits of the new special tax regime will be limited in time;
salary threshold: a minimum salary level is expected to be introduced in order to be eligible for the new special tax status.
tax free allowances, travel exclusion: these would be abolished and replaced by a lump-sum exemption from taxation of 30% of the remuneration (possibly with a ceiling)

At present however, nothing has been confirmed by the Belgian Government. There is merely an intention to revise the current regime which finds its origin in the Administrative Circular of 1983.

Therefore, no information is currently available with respect to the following important matters:

the date of entry into force of this new special tax regime;
the introduction of a possible transition or phase-out period.

Upon publication of the draft legislation further updates will be provided with the likely result being that a review should be undertaken of the direct impacts to those individuals under the existing Special Tax Regime and the eligibility requirements for future intended assignees into Belgium for the revised regime.

Nicolas Stockmans
Nicolas.Stockmans@bdo.be