Living and earning money in Belgium means you have to pay income taxes in this location. However, you must first figure out what is taxable before making a payment. In addition, differentiating between different tax codes can be difficult. Plus, if you do not speak German, Dutch, or French, chances are you may not comprehend what is written on the different Belgian tax forms. But if you want to successfully file your income tax return in this country, you must understand how the Belgian tax system works.
Belgian Tax System
As long as you are employed in Belgium, you are required by law to pay taxes. Also, living in this country means you will have to pay one of the highest taxes in the Eurozone. If you earn more than €42,370, you must pay a 50% income tax. The collection of this levy is handled by the finance ministry of the country.
Unlike in some countries, the tax you pay is deducted directly from the source before you receive your salary in Belgium. Nonetheless, if you work as a freelancer, the law of the land requires you to file your tax return annually. In addition, the tax collection does not involve social security payments. You will have to pay 13% or 22% of your income if you are self-employed. If you are a business owner, you must pay 25% of company income as tax.
People Who are Eligible for Paying Taxes
The nature of your tax return eligibility is determined by your residence status. If you are considered by the Belgian tax authority as a resident, you will most likely receive notice for tax payment. When this happens, you will have to pay taxes for all your global earnings. However, living in the country as a non-resident only obligates you to return income taxes.
Other Taxable Revenues
Apart from personal income, other revenues are taxable. These items include the following.
- Employment benefits – health insurance and other perks you get from your employer may be taxable. In general, you will give a levy that is proportional to the percentage of value you receive from the benefits. However, benefits that are directly related to your work do not attract any levy.
- Investments and savings – the amount you pay in taxes for savings depend on your residency status. Also, what you return depends on whether the investment is unregulated or regulated. Unregulated investments require tax payment irrespective of the value of the investment. However, you will have to own an investment that is worth about €1,000 to pay taxes for it.
Filing Income Tax Return
The Belgium tax system offers you some level of flexibility when paying income tax. In general, you will receive tax papers from the tax authorities. If you do not receive any documents, you can do everything on the internet.
- You will want to fill in the documents you receive. Afterward, you should send the signed documents through the post. Alternatively, you can file your levies via the tax portal. All you need to do is sign into the portal using your National ID card. Once on the platform, you can settle all your taxes.
- However, some people do not receive any tax documentation. In such a case, you will most likely receive a simplified declaration proposal. This document gives you a visualization of the tax you will have to pay in the future. It may provide you with information about the tax refund you may receive. Finally, you will have to either approve or disapprove the proposal.