Until 31 December 2021, if specific conditions were met, the Belgian special tax regime for executives, researchers and other specialised staff could become applicable to the employment situation of foreign nationals working temporarily in Belgium. This regime was based on the Circular from 8 August 1983.
In previous newsflashes by PwC Belgium of 15 October 2021, 3 December 2021 the upcoming changes to the Belgian expat tax regime were highlighted. By the end of 2021 a new special tax regime for incoming taxpayers and one for researchers was voted and approved, replacing the old special tax regime for new employment situations (which start in Belgium) as of 1 January 2022. See the PwC Belgium newsflash of 6 January 2022.
In order to allow a smooth transition, the Belgian tax authorities have recently issued a circular (2022/C/9), which includes a two-year transition period during which the old regime can still be continued or, for certain employment situations, a possibility to opt-in. It can be summarised as follows :
Employment situations that start in Belgium as of 1 January 2022
- Applications for obtaining the old special tax regime can no longer be submitted for expats who only started working in Belgium as of 1 January 2022. Those individuals can potentially only benefit from the new regime (if all conditions are met and a positive decision is issued by the Belgian tax authorities).
Employment situations that started in Belgium before 1 January 2022
- If an expat started working in Belgium before 1 January 2022, then the normal submission period of 6 months (under the old regime) is still applicable. Any remaining applications for obtaining the old special tax regime (e.g. employment situations which started in December 2021) must be submitted by 30 June 2022 at the latest. No further extension (beyond the 6-month filing deadline) is possible and the expat needs to meet the conditions determined in the circular of 8 August 1983.
- If the old regime is granted, then the old special tax regime can remain applicable until 31 December 2023 by way of a phase-out period. Foreign executives who can not make use of this full transitional period (e.g. because their employment in Belgium is terminated in 2022 or in 2023), can afterwards not reactivate the old special tax regime.
- Certain expatriates, whose employment situation started before 1 January 2022, but who are working in Belgium (under the old special tax regime) for less than 5 years on 1 January 2022, have the possibility to opt in for the new tax regime for inbound taxpayers or researchers (if they meet the conditions of the new regime). Opting in requires the employer or company to submit an application before 31 July 2022.
- If the taxpayers do not opt for the new regime or they opt for the new tax regime but receive a negative decision from the Belgian tax authorities, then the old special tax regime may still remain applicable until 31 December 2023 (phase-out).
- If the taxpayers opt for the new regime and they receive a positive decision from the Belgian tax authorities, then the old special regime will no longer be applicable as of 1 January 2022. In such a case, the new regime will become applicable to the professional income obtained as of 1 January 2022.
Authors: Sandrine Schaumont and Philip Maertens
