If you live in one country but work in another, you will often have tax obligations in both countries (the country of residence and the country of employment). However, if the two countries have entered into an agreement for the avoidance of double taxation, tax on the same income will only have to be paid in one country.

Belgium has entered into a double taxation agreement with each individual EU Member State. These different agreements always stipulate which country (country of residence or country of employment) has the right to levy tax for each income category.

As these agreements may vary from country to country, it is advisable to always consult the convention applicable to your situation. It is also important to consult the correct, most specific article (depending on the type of occupational income) within each convention. All double taxation agreements concluded by Belgium can be found here.

As a tax resident in Belgium, you must submit an annual personal income tax return. In the return, you must include all the income that you have received worldwide. You will also have to include, as taxable income, the allowances (remuneration, income, profits, etc.) that you have received as a result of the professional activity carried out in the other country.

If, on the basis of the agreement with the other EU Member State, that country has the right to tax the income, you can request exemption from taxation in the personal income tax return. You can find more information about this here.

The conventions specify the way in which Belgium, as the country of residence, must avoid double taxation in the article on the method for avoiding double taxation. It relates to exemption with a progression clause. In other words, the occupational income to be exempted is not subject to income tax, but the income itself is taken into account in determining the rate applicable to other income. Some agreements do, however, allow municipal tax to be charged on the occupational income to be exempted.

Belgium levies tax as the country of employment

If, on the basis of the agreement with your country of residence, Belgium has the right to levy tax as your country of employment, the income will be taxed in Belgium. As a result, you have to submit a non-resident tax return.

Your country of residence levies tax

If, on the basis of the agreement with your country of residence, that country has the right to levy tax, the income will not be taxed in Belgium and there is no obligation to submit a non-resident tax return.

Please note! Exemption from submitting the non-resident tax return will be granted only if:

• all the conditions are met (see agreement itself) and
• you have the right to invoke the agreement. This is only the case if you are regarded as a tax resident by the tax administration of your country of residence. To this end, you must be able to present a certificate of residence (drawn up by the tax authorities of your country).

Tax exemption in Belgium is therefore always ‘subject to conditions’.

General

Belgium has also concluded double taxation agreements with its immediate neighbours (the Netherlands, Germany, Luxembourg and France). Those agreements provide that the country of employment is to levy tax on remuneration paid to a worker who has entered into an employment contract with a private employer established in the country of employment.

Exception

The agreement with France contains an exception, however, concerning workers with the status of frontier worker. In some cases there is a special taxation status for workers who:

• live in the French border region and
• work in the private sector in the Belgian border region.

Despite their employment on Belgian territory, their income earned in Belgium remains taxable in their country of residence, France. However, this is subject to strict conditions and formalities. Moreover, it is a temporary measure which will expire in 2033. You can find more information in Circular No AFZ/2008-0408 (AFZ 17/2009) dated 17 December 2009.

You live in Belgium but work in another EU Member State

Personal income tax is calculated on all taxable income, even if some of that income was realised or received abroad.

If the income you have received as a result of work performed in another EU Member State is taxable in the other EU Member State (on the basis of the double-taxation treaty), you can request an exemption from income tax on that income in your personal income tax return.

When your personal income tax is calculated, this exempted income is added to the income that is taxable in Belgium to determine the tax rate applicable to the latter (exemption with maintenance of progressivity). After all, the higher your income, the higher the rate of personal income tax.

This exempted income is not therefore taxed itself, but it may mean that your other income (that is actually taxable in Belgium) is taxed more heavily.

You work in Belgium but live in another EU Member State

Non-resident tax is only calculated on the income in respect of which Belgium has the power to levy tax (on the basis of the double-taxation treaty) and that was realised or received in Belgium.

When non-resident tax is calculated the income that is exempted on the basis of the double-taxation treaty is not added to your other income. In contrast to the situation in the area of personal income tax, it therefore has no impact on the tax rate applicable to the income that is taxable in Belgium.

If the earned income that is taxable in Belgium amounts to at least 75% of the total earned income (both the Belgian and foreign earned income), you are entitled to a ‘tax-free allowance’. This means that a portion of your taxable income is not taxed. The tax-free allowance is EUR 9 270 (for 2022 income). (Income 2023: EUR 10.160) It may be higher depending on your personal situation (e.g. if you have any dependent children).

The amount of tax you pay is also reduced if you have

• certain types of income (e.g. pensions and substitute income)
• certain expenses (e.g. childcare, pension savings, etc.)

Numerous tax benefits are also subject to the condition that the earned income that is taxable in Belgium accounts for at least 75% of the total earned income.

Residents of France, the Netherlands and Luxembourg whose earned income that is taxable in Belgium accounts for less than 75% of their total earned income are nevertheless still entitled – on the basis of the double-taxation treaty – to claim personal tax benefits (such as the ‘tax-free allowance’). These benefits are, however, reduced:

• if you are a resident of France: on a pro-rata basis corresponding to the ratio of employee remuneration (or profit or income from self-employment) that is taxable in Belgium to total earned income
• if you are a resident of the Netherlands or Luxembourg: on a pro-rata basis corresponding to the ratio of income that is taxable in Belgium to total global income.

On the basis of most agreements, the tax on the income received by a foreign sportsperson from sports performed on Belgian territory is levied in Belgium.

The foreign sportsperson is active in Belgium for more than 30 days in each 12-month period (to be considered in respect of each income debtor)

The foreign sportsperson must also submit a non-resident tax return (natural persons).

The foreign sportsperson is active in Belgium for fewer than 30 days in each 12-month period (to be considered in respect of each income debtor)

The foreign sportsperson must pay withholding tax at the rate of 18% on the income derived from his or her work as a sportsperson in Belgium.
The foreign sportsperson does not have to submit a non-resident tax return himself or herself if he or she has no other Belgian income for which he or she has to submit a tax return. The 18% withholding tax constitutes the final tax.

Please note! The foreign sportsperson can, however, choose to submit a non-resident tax return even if he or she has been active in Belgium for fewer than 30 days. This may sometimes be more advantageous than the 18% withholding tax.