Belgium

Employment expenses

In determining the tax base, compulsory social security contributions (paid in Belgium or abroad) are fully deductible.

Employment-related expenses are also deductible, provided they are substantiated; alternatively, standard deductions may be claimed.

For employees, the standard expense deduction amounts to 30% of the gross earning, up to a ceiling of EUR 5,520.

For remunerated directors, the standard deduction is a flat 3% and cannot exceed the ceiling of EUR 2,910.

In addition to social security contributions and professional expenses, some non-business expenses can also be deducted from the taxable basis, and personal exemptions are granted.

Personal deductions

Support payments

80% of the support (alimony) payments to near relatives or a separated spouse are deductible (non-residents can deduct only payments made to residents of Belgium; however, there are some tax treaty exceptions).

Tax reductions

Some non-business expenses give rise to a tax reduction.

For income years 2020 to 2023, the annual indexation of some tax reductions and tax exemptions are frozen. Consequently, the maximum amounts for a number of tax reductions will not be indexed during these four years and will remain at the same level as income year 2019. As of income year 2024, the annual indexation will resume.

Regarding the maximum amount for pension savings, please note that a majority amendment was tabled before the Finance Committee with a view to maintaining the upper limits applicable for the tax years 2022 to 2024 at their level for the tax year 2021 (i.e. EUR 990 and EUR 1,270).

At the federal level, the most commonly granted reductions mainly concern:

• Pension savings contributions, with a maximum of EUR 990 or EUR 1,270, depending on the extent of the tax reduction (i.e. 30% or 25%, respectively).
• Employee's contributions to group insurance: 30%.
• Charitable contributions of minimum EUR 40 made to certain recognised EEA institutions give right to a 45% tax reduction.
• Life insurance premiums: 30% with a maximum of EUR 2,350.
• Remuneration costs of domestic personnel give right to a 30% tax reduction (up to certain limits and under certain conditions).
• Child custody expenses, up to a maximum of EUR 15.7 per day for income year 2022 for children under 14 years of age, give right to a 45% tax reduction.

At the regional level, the most commonly granted tax reductions concern:

• The capital repayment of a mortgage loan.
• Payment of services performed in the framework of local employment agencies or paid with service-checks.
• Security investment against theft or fire.
• Expenses incurred for the maintenance and renovation of certain real estate.

Personal exemptions

In addition to the above-mentioned deductions, some personal exemptions are granted. The following amounts are deductible in determining taxable income.

For each taxpayer

The personal basic exemption amounts to EUR 10,160.

For dependent children

For any other dependent person, an amount of EUR 1,850 is deductible.

It must be stressed that the exemption takes place on the lowest part of income (at the lowest marginal tax rates).

Handicapped children or other dependants count for two children/dependants in the above scale.

For each child less than three years old on 1 January of the tax year, the above amounts are increased by EUR 690, provided no child custody expenses are deducted.

The rates and brackets applicable as of assessment year 2024 (income year 2023) to determine the taxes linked to the personal exemptions are as follows:

The income of each spouse/legal cohabitant is taxed separately. Special rules exist when one spouse has no or low earned income, as noted below.

• Only one spouse receives earned income: A splitting is applicable. An income equal to 30% of the gross taxable earnings of the spouse will be attributed to the spouse without earnings and taxed in that spouse's own name (the so-called 'marital quotient'). Income that may be attributed to the non-earning spouse cannot exceed EUR 12,550. If one of the spouses is self-employed or is engaged in a liberal profession and is effectively assisted by the other, an income equal to a maximum of 30% of the earning spouse's net earnings will be attributed to the assisting spouse if the net earnings of the latter do not exceed EUR 16,290. The maximum of 30% can be exceeded (up to a maximum of 50%), provided sufficient evidence of the real assistance of the helping spouse is given.
• Both spouses receive earned income: The above regulations also apply where both spouses receive earned income if the earnings of one spouse exceed 70% of total earnings and the earnings of the other spouse do not reach EUR 12,550. In this case, income may be attributed to the spouse earning less, until 30% of total earnings without exceeding the maximum of EUR 12,550 is reached.

The exempt income, personal deductions, and the attribution of income to the spouse are, in principle, applicable both to residents and non-residents, although for non-residents these exemptions and deductions are only applicable provided they earn at least 75% of their worldwide professional income in Belgium. Moreover, in order to be entitled to regional tax benefits in Belgium, those non-residents must also maintain their tax residency in another member state of the European Economic Area.