Doing Business in Belgium

Foreign Direct Investment In Belgium

The Government welcomes inward investment from foreign companies, providing an array of tax benefits and shelters to encourage inward investment in key growth areas for the country. Tax benefits vary according to Government strategy, but generally the country is always open to investment opportunities.

Registering A Company And Establishing an Entity In Belgium

A foreign company is not required to have a legal entity in Belgium in order to process a Belgian payroll.

Business Banking In Belgium

Payments to the Belgian authorities and to employees in Belgium can be made from a bank account outside Belgium.

Working Week And Working Hours In Belgium

The working week in Belgium is Monday to Friday. Working hours must not surpass 8 hours per day or 38 hours per week. It is generally forbidden in Belgium to work outside the regular working hours, on Sundays, bank holidays and at night. It is compulsory that when working beyond the statutory working hour’s workers must be compensated with sufficient rest time. Night work may be approved in cases where the nature of work justifies it. For example employees working in the health care sector, hospitality, entertainment and agricultural workers.

General Information:

Full name: Kingdom of Belgium

Population: 10.7 million (UN, 2010)

Capital: Brussels

Major Languages: Dutch, French, German

Monetary Unit: 1 euro = 100 cents

Main Exports: Machinery And Electrical Equipment, Chemicals, Vehicles, Metals, Diamonds

GNI per Capita: US $45,910 (World Bank, 2010)

Internet Domain: .be

International Dialling Code:+32

Hello Hallo

Good Morning Goedemorgen

Good Evening Goedenavond

Do you speak English? Spreek Je Engels?

Good Bye Tot Ziens

Thank You Dank u

See you Later Zie Je Later

Dates are usually written in the day, month and year sequence. For example, 1 July 2012 or 1/7/12.

Numbers are written with a period to denote thousands and a comma to denote fractions. For example, € 3.000,50 (three thousand Euro and fifty cents).

Income Tax & Social Security In Belgium

The tax year runs from 1st January to 31st December.

It is not necessary to be licensed to make any tax and/or social security filing on behalf of a customer.

However, for filing tax and social security returns, you do need to have access to the website of the social security and tax authorities via ID card or certificate.

Payroll providers can gain access to this via a qualified certificate. The company needs to be assigned by the customer as “service provider”; this is done via a form that needs to be signed by a person who has the authority to sign on behalf of the customer.

Legislative decisions are taken by the federal authorities and by the authorities of the communities and regions.

Related to payroll, the following authorities are relevant:

National social security office RSZ/ONSS Victor Hortaplein 11 1050 Bruxelles Belgium

Belgian Federal Public Service Employment, Labour and Social Dialogue FOD WASO/SPF ETC Ernest Blerotstraat 1 1070 Brussels Belgium

Federal Public Service Finance The tax authorities have decentralised offices – you can find the relevant office and their address via the following website: http://annu.belbone.be/qw/index.php?lang=nl

On the following website you can find the legislative texts relating to Belgian income taxes: www.fisconet.fgov.be General website for Belgian tax authorities: www.fiscus.fgov.be

Income Tax In Belgium

The employer is required to do the following:

  • deduct withholding taxes from salary employee
  • pay withholding taxes quarterly/monthly to tax authorities
  • file quarterly/monthly withholding tax return (called form “274”)
  • prepare individual yearly tax slip (called form “281”) and sent to employees + tax authorities

It is the responsibility of the employee to fill out a yearly tax return form

Monthly contributions must be made by the 15th of the following month, or by the first preceding regular working day, if the 15th is a not a regular working day (weekend, public holiday).

Small companies only have to pay per quarter, i.e. by the 15th of the month following the quarter.

Withholding Tax Discounts for Start-Up Companies

As from 1st August 2015 any company who starts up in Belgium can benefit from an exemption of withholding tax on earned incomes.

A Belgian employer pays withholding tax on earned income for each employee. It is an advance on the employee’s income tax that is levied on his/her earned income. By applying discounts the government are hoping that more companies will hire more employees. Discounts will also be given to companies that operate within zones with disrupted economic activity and researchers. The new discounts will apply to companies that have been registered in the Crossroads Bank for Enterprises for a maximum of 48 months.

For an SME the discount rate is 10%. The criterion to get the discount for an SME company is as follows;

  • Annual average of a maximum of 50 employees
  • Annual turnover excluding VAT of maximum €700,300,000.00
  • Balance sheet total of maximum €350,000.00

For micro-companies the discounted rate is 20%. The criterion to get the discount is as follows;

  • Annual average of a maximum of 10 employees
  • Annual turnover excluding VAT of a maximum of €700,000.00
  • Balance sheet total of maximum €350,000.00

 

Social Security in Belgium

Social security requirements, employer:

  • “Dimona”-declaration: notification of first day/last day of employment (“Limosa”-declaration for foreign employees)
  • Deduct social security from salary employee
  • Pay the employee and employer contributions towards social security authorities: on a quarterly basis + in most cases also monthly advances are to be paid
  • File quarterly social security return

Social security requirements, employee:

  • Reimbursement medical costs

To be able to receive reimbursement of medical costs, the employee should affiliate with a “mutuelle”. There are several different “mutuelles” in Belgium (e.g. Partena, CM, Euromut.) You can freely choose to which mutuelle you affiliate.

Late submission of social security contributions incurs the following penalty:

  • 7% interest per year + penalty of 10%.

Late submission of a social security return incurs the following penalty:

  • A fixed sum of € 495,79, which may be increased with € 247,89 per bracket of € 24.789,35 for contributions above € 49.578,70.
  • The social security system for employees includes one national pension scheme.
  • Separate pension schemes exist for civil servants and independent workers.

Reporting Tax In Belgium

Monthly

Report: Withholding tax return (monthly or quarterly depending on the size of the company) Legal name of report: Document ‘274’ Information required to complete form: The total taxable income and payable withholding tax The 274 needs to be filed in an electronic way by means of the ‘finprof’-web-application, by the 15th of the following month. It can be submitted on behalf of a partner. The customer is not required to sign the form however the sender needs to sign (via certified electronic signature)

Quarterly

Report: Social security return Legal name of report: DMFA-declaration Information required to complete form: Information with regard to the quarterly salary and performance (working days) of the employees The quarterly social security return needs to be submitted in an electronic way to the social security administration before the last day of the month following the end of the quarter:

  • For the 1st quarter: April 30
  • For the 2nd quarter: July 31
  • For the 3d quarter: October 31
  • For the 4th quarter: January 31

The documents can be submitted by a partner, provided that they are appointed as “service provider”. The customer is not required to sign the form however the sender needs to sign (via certified electronic signature)

Yearly

Report: Tax return Legal name of report: Fiche 281 Information required to complete form: Detailed information per employee on the taxable income and paid withholding taxes The documents can be submitted by a third party. The customer is not required to sign the form however the sender needs to sign (via certified electronic signature)

New Employees In Belgium

New starts are required to be registered via a ‘first day of work declaration’, called ‘dimona (Déclaration Immédiate – Onmiddellijke Aangifte) declaration’ Employers must declare each employee hired, to the social security authorities, prior to the entry into service of that employee. Termination of service must be declared no later than the first business day following the termination of contract.

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