SIGNIFICANT DEVELOPMENTS
The information in this entry relates to tax year 2001 (calendar year 2000) and, where applicable, to tax year 2002 (calendar year 2001).
As from January 1,1999, new legislation concerning stock options applies.As from February 1,1999, professional withholding tax is due where remuneration is paid or attributed by Belgian residents and, under certain circumstances, when remuneration is paid or attributed by nonresidents.
TERRITORIALITY AND RESIDENCE
Belgium taxes its residents on their worldwide income, irrespective of their nationality. Residents of Belgium are those who have established their domicile or their economic base in Belgium, that is, those who have registered in the population register of a commune in Belgium. The fiscal
residence of married couples is determined by the place where the family is located. Nonresidents of Belgium are subject to income tax only on their income earned or collected in Belgium.
Within Belgium, nonresident status is granted to non-Belgian executives or specialists who “temporarily” work in Belgium for an international group.
Those persons deemed to be nonresident are allowed tax concessions on the payment of certain allowances, which are not taxable on the employee and are deductible for the employer. In addition, they are taxed on their Belgian-source income only.
GROSS INCOME
Employee gross income/ Foreign executives or specialists working temporarily n Belgium and qualifying for nonresident tax status need not include in their gross taxable income reimbursements for additional expenses incurred from their transfer to or employment in Belgium . The additional expenses listed below may be reimbursed on the basis of actual amounts or in the form of lump-sum allowances.
1.One-time moving expenses and the costs of setting up a house in Belgium.
2.Ongoing expenses, for example, cost-of -living allowances, housing allowances, school fees, home-leave allowance, travel expenses of children studying outside Belgium, exchange losses, and tax equalization.
Such additional expenses will be, within certain limits, exempt from tax to the extent that the total annual amount(excluding school fees and one-time expenses) does not exceed BEF450,000 (BEF1,200,000 in the case of executives working at a control and coordination office, research center, or scientific laboratory). Duties performed outside Belgium are
proportionately exempted , but declaration must be made for total worldwide income earned within the employer’s group.
As from January 1,1999,new legislation concerning employee stock options plans applies. Stock options are taxable at the time they are granted. The value of a stock option listed on a stock exchange is determined as the closing market price of the day preceding the offer of the option.The value of a stock option not listed on a stock exchange is determined on a lump-sum basis and amounts to a certain percentage of the fair market value of the underlying stock then increased by the discount, if any.
This basic percentage is set at 15%, to be increased by 1% per year of option period exceeding five years.
Under certain conditions, the above percentages are reduced by 50%.
Capital gains and investment income/ Capital gains and foreign-source investment income cashed outside the country are not taxable for nonresidents working in Belgium. Residents and nonresidents are, under certain conditions, taxed on capital gains realized on the sale of land, as well as on the sale of buildings, located in Belgium. Depending on the situation, this tax is levied either by means of a special levy(33%/16.5%)
or through the application of professional withholding tax.
DEDUCTIONS
Business deductions/Social security taxes are deductible. Employment-related expenses are deductible, provided they are substantiated; alternatively, a standard deduction of up to bEF112,000 may be claimed.Nonbusiness expenses/The following nonbusiness expenses are deductible.
1.80% of the support payments to near relatives or a separated spouse.(nonresidents can deduct only payments made to residents of Belgium; however, there are some tax treaty exceptions).
2.Interest resulting from mortgage loans for real estate situated in Belgium.
3.Charitable contributions to certain institutions to the extent of 10% of taxable income, with a maximum of BEF11,227,000 for tax year 2001.
4.50% of the remuneration costs of domestic personnel.
5.80% of children’s custody expenses, up to a maximum of BEF450 per day.
The following nonbusiness expenses give rise to a tax reduction, which is calculated on the basis of the average tax rate on the joint taxable income, with a minimum of 30% and a maximum of 40%. (In some cases, it is calculated on the basis of the
[1] [2] [3] [4] 下一页
