Education expenses (duly justified with invoices) for the expatriateâs children in primary or secondary schools, while repetitive in nature, are expenses that can be excluded in addition to the maximum amounts mentioned above. The credit phases out for single parents with a modified adjusted gross income over $200,000, and … The most important thing to remember is that crèche places go very quickly, and you should reserve your place well before birth. Child Tax Credit. The determination of the expatriateâs 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 expatriateâs country/jurisdiction of origin. Expatica helps make your expat journey the experience you've always wanted. Generally, with respect to personal property income, the taxpayer is entitled to a foreign tax credit referred to above and with respect to income other than personal property income, an exemption is provided. Carryback. b) Will the answer be different if the cost directly or indirectly is charged to/allocated to the company situated in Belgium} (i.e. For example: monthly, annually, both, and so on. 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 … 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. However, the actual allowance paid only qualifies for exclusion to the extent permitted by prescribed guidelines. Under the Belgian expatriate special income tax regime, moving costs (duly justified with invoices) upon arrival in/leaving from Belgium are to be considered as costs proper to the employer (no ceiling applicable). The exempt income may be taken into account in determining the rate of tax on Belgian-sourced income (exemption with progression method). Are there any areas of income that are exempt from taxation in Belgium? The maximum standard business deduction for employees is EUR4,880. and K&G have a list of accepted baby-minders. No credit for actual foreign taxes paid on other income is available under Belgian domestic law, but foreign taxes are deductible against taxable income. The expatriate must be a foreign national. The expatriate must be either an executive or a director of a company, or a researcher or a specialist. For directors (board members and equivalent), the standard business deduction is 3 percent with a maximum deduction of EUR2,580. The IRS Interactive Tax Assistant tool Is My Child a Qualifying Child for the Child Tax Credit? Also, when such individuals have foreign dividends remitted directly to Belgian bank accounts, some tax treaties permit Belgium to withhold tax. The following expenses are considered to be non-repetitive expenses. 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. KPMG International provides no client services. What language does the staff speak? Each child and dependent can bring you a deduction of $4050. A distinction is made between non-repetitive expenses and repetitive expenses. Income tax is calculated by applying a progressive tax rate schedule to taxable income. If any outstanding tax liability related to the Belgian assignment is paid by the employer after the individual has left Belgium, this payment will be considered as a taxable benefit on behalf of the individual which will trigger a filing requirement. The amount of taxes a person in Belgium … In the French-speaking system costs range from EUR 1.99 to EUR 28.04, depending on household income, but tax deductions … Resident taxpayers can opt to file their return electronically. Foreign exchange gains and losses are, in principle, not taxable or tax deductible. For example, if you and your partner work in different countries you will get child benefit from the country where you and your partner live. 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. If the actual business expenses exceed the standard business deduction, the actual expenses may be deducted. Spouses and legally cohabiting partners are taxed separately on all income. Repetitive expenses that qualify for exclusion include allowances granted to cover the differences in cost-of-living and housing between Belgium and the expatriateâs country/jurisdiction of origin, home leave, and tax equalization. However, foreign real property income is exempt to non-residents. Resident taxpayers must obtain the necessary forms from the Ministry of Finance if they have not received them by 1 June. There is a tax deduction of up to EUR 11.20 per day. The tax authorities are thus adopting the economic employer approach. You can claim child benefit in the country you are working. Here’s a guide on how to enroll your child in childcare in Belgium. There are usually no more than 15 children in each ‘Farandoline’. The TOG care allowance is for disabled children living at home, and the amount of the TOG allowance is EUR 211.45 every three months. If so, how? 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 ). If you live in the Netherlands and work in Belgium, you will be entitled to Belgian child benefit. social security). dividends and interest. In principle, Belgian law provides that the employers deduct a withholding tax from salaries payable to employees as determined by prescribed tax tables. Part of this credit can be refundable, so it may give a taxpayer a refund even if they don't … Interest income is not remitted in Belgium. 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 employeeâs salary and costs are recharged to the host entity, then the host country/jurisdiction tax authority will treat the host entity as being the âeconomic employerâ and therefore the employer for the purposes of interpreting Article 15. Social security in Belgium… The amount of income tax your employer withholds from your regular pay depends on two things: The amount you earn. KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (âKPMG Internationalâ), each of which is a separate legal entity. All rights reserved. The Child Tax Credit. Tax brackets for income year 2020 are applicable to net taxable income after the deduction … 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. If you are already a multilingual family, might another language be too much? Persons are irrevocably presumed to be resident of Belgium when their family lives in Belgium. KPMG International entities provide no services to clients. Deductions lower your taxable income (and reduces your tax burden), while tax credits are a dollar-for-dollar reduction to your tax bill. Find out how KPMG's expertise can help you and your company. 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. Income tax is levied on the basis of the net rental income after deduction of a standard allowance. Interest income is not remitted to Belgium. Tax-exempt income, regularly granted by the Belgian employer, includes meal vouchers, representation allowances, and daily expense allowances. Belgian residents are taxed on their worldwide earned and passive income. Capital gains realized on land and buildings held for private purposes are taxable to resident and non-residents taxpayers under certain conditions. Resident taxpayers are taxed on income from real property located both in Belgium and abroad. Exchange rate used for calculation: USD1.00 = EUR0.8934. 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. as a general management fee where the duties rendered as a board member is included)? The expatriate must be a non-resident for Belgian income tax purposes. 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. For the calculation of the hypothetical regional tax, taxpayers are deemed to be resident in the capital of their home country/jurisdiction. 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. There is a tax deduction of up to EUR 11.20 per day. If yes, what is the de minimus number of days? 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. 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. The principal residence located in the EEA is, in many cases, free of personal income tax. 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. The information you give your employer on Form W–4. There is another case in which you can get extra allowance. CVBA/SCRL civile) and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (âKPMG Internationalâ), a Swiss entity. Some expats may be surprised at the young age Belgian parents enroll their children in crèches (public nursery schools) and playgroups. Application of Belgian social security contributions. However, if you want to learn more about foreign tax … Extra allowance per child less than 3 years old (if no deductions for actual child care expenses incurred are claimed) 610: Residence rules. All individuals resident in Belgium and non-resident individuals taxed on Belgian-sourced income are required to file an annual tax return. They may be borrowed free of charge. Expatica uses technology such as cookies and scripts to personalize content and ads, provide social media features, and analyze our traffic. The Protecting Americans from Tax Hikes (PATH Act) made changes to the tax law: Refund delays: If you claim the EITC or ACTC, we can’t issue your refund before February 15. Earned Income Tax Credit (EIC) Child tax credits; Unemployment Income reported on a 1099-G; 100% Accurate Calculations Guarantee: If you pay an IRS or state penalty or interest because of a TurboTax … 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. Interests accrued on a regulated savings account are tax-free up to EUR990 per taxpayer. What are the general tax credits that may be claimed in Belgium? January … The term tax deduction refers to any expense that can be used to reduce your taxable income. 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