Social security contributions
The employee's share of social security taxes is 13.07% of the total gross compensation, with no cap.
The employer's share currently varies around 27%. The tax shift applicable since 2016 provides for a progressive decrease of the employer's social security contributions to 25%. Moreover, the tax shift provides for a complete exemption of employer social security charges for the first employee hired in the next five coming years and an extension of the reduction of the employer's contributions for the first six employees. The latter measure will be extended until 31 December 2021 although the tax shift entered its final stage on 1 January 2019 and implements additional (though minimal) changes at the level of structural reductions.
Social security taxes are deductible in determining taxable income. For foreign employees with short-term assignments in Belgium who continue to be subject to the social security schemes of their home country, an exemption from social security may be granted, depending on the home country of the claimant.
As an example, foreign employees who are transferred to Belgium by a United States (US) employer for a period not exceeding five years and who remain covered by the US social security scheme, the Belgium/US social security agreement provides for full exemption from Belgian social security taxes.
According to several Supreme Court decisions, additional expenses reimbursed to foreign executives or specialists working temporarily in Belgium (see Employment income in the Income determination section) are, within certain limits, exempt from social security taxes.
In the context of the Coronavirus and the increased teleworking, the place of work will not be taken into account to determine the applicable social security legislation. This agreement is applicable within the EU countries and should be considered on a case by case basis with non EU countries with which Belgium has concluded a social security agreement. This neutralization rule is applicable until 31 December 2021.
Special social security contribution
A special social security contribution is also due, the amount varying between EUR 9.30 and EUR 60.94 per month. This contribution is collected by means of monthly deductions from net salary, although the final amount due will be determined through the tax return process on the basis of actual net taxable family income.
The special social security contribution is not tax deductible. The maximum amount due by a family on a yearly basis amounts to EUR 731.28.
Value-added tax (VAT)
The standard VAT rate is 21%. This rate applies to all goods and services not qualifying for one of the reduced VAT rates.
The following supplies of goods and services have a 12% VAT rate:
- Restaurant and catering services, excluding beverages.
- Phytopharmaceutical products.
- (Inner) tubes.
- Certain combustible material.
The following supplies of goods and services have a 6% VAT rate:
- Works on immovable property (limited in time and with strict conditions).
- Basic necessities, such as food and pharmaceuticals.
- Some printed materials.
- Distribution of water through pipelines.
- Transport services of persons.
- Hotels and camping.
- Admission to cultural, sporting, and entertainment venues.
The following supplies of goods and services are VAT exempt with credit ('zero-rated'):
- Exports and certain related services.
- Intra-Community supplies of goods.
- Certain transactions on goods placed in a Customs or VAT warehouse.
- Imports, intra-Community acquisitions, and local trades within a VAT warehouse or under special customs regimes.
- Cross-border passenger transportation by ship or aircraft.
- Supplies to diplomats and international organisations.
- Certain supplies of goods and services to certain vessels and aircrafts mainly involved in international passenger transport.
The following supplies of goods and services are VAT exempt without credit:
- Healthcare services (excluding cosmetic surgery).
- Social services.
- Education services.
- Sport services.
- Cultural services.
- Banking services.
- Interest charges.
- Financial services (option to tax possible for payment and receipt transactions).
- Insurance services.
- Land and real estate sales.
- Property leasing and letting.
It should be noted that specific conditions may apply to the above two categories.
Due to Covid-19 pandemic crisis, deliveries, intra-community acquisitions and imports of vaccines against Covid-19 and of in vitro diagnostic medical devices for this disease, as well as the provision of services related to these vaccines and medical devices are exempt from VAT for two years, from January 1, 2021 to December 31, 2022 included.
Furthermore, the reduced rate of VAT of 6% on masks and hydroalcoholic gels for deliveries, intra-community acquisitions and imports of goods necessary for the prevention of the spread of Covid-19 remains in force until March 31, 2021 included.
Net wealth/worth taxes
Since March 2018 and until 30 September 2019, there was a 0.15% tax due on securities accounts that reached or exceeded EUR 500,000 (per account holder). In October 2019, the Belgian Constitutional Court issued a decision annulling this tax on securities accounts, with effect as of 1 October 2019.
A draft bill establishing a new annual tax on securities accounts was approved by the Council of Ministers on November 2020. The Bill of Law foresees the introduction of a solidarity tax of 0,15% on securities accounts that reach or exceed EUR 1.000.000. The new solidarity tax will have an impact on legal persons as well as financial products under Branche 23 are also in scope.
Inheritance and gift taxes
Inheritance tax is paid by heirs or legatees on the net amount inherited by each recipient from the estate of any deceased person who is considered to be a resident of Belgium. Since 2018, the family home is not subject to tax when inherited by a direct-line heir, spouse, or cohabitant (applicable to all regions).
A special form of inheritance tax arises on the death of a Belgian non-resident who leaves property in Belgium. Tax is chargeable on the gross value of the property instead of on the net amount inherited by each recipient, at standard rates of inheritance tax. Inheritance tax rules differ depending on the region where the deceased had fiscal residence.
In principle, a gift must be made by way of a Belgian notary deed. As all notarial deeds are required to be registered, Belgian gift taxes becomes due. Manual gifts and indirect gifts are exempt from Belgian gift taxes.
Gift tax rates vary based on the region where the gift is registered. In the Flemish and Brussels capital regions, registered gifts of movables are taxed at a reduced flat registration rate of:
- 3% for gifts between spouses, children, grandchildren, parents, grandparents, and cohabiters, or
- 7% for gifts between other individuals.
According to Article 7 of the inheritance taxation codes (IHTC) of each region, gifts made no more than three years prior to the death of the donor and that were not subject to Belgian gift taxes are deemed added to the estate of the donor and are subject to inheritance taxes. Such gifts must be reported in the inheritance tax return at the value that the donated assets have at the time of death.
The inheritance tax law has recently been deeply reformed at the federal level, and the new rules have entered into force on 1 September 2018. As a result, important changes in the regional inheritance taxes have been implemented and specific advice is highly recommended in this respect.
Local property tax is assessed on 'cadastral income', i.e. the deemed rental value attributed to the property by the authorities. Rates generally range between 20% and 50% of the 'indexed cadastral income'.
Resident taxpayers who own a real estate abroad must report their foreign property in their Belgian tax return. Since 2021, they must submit a declaration to the Administration of Measurement and Valuations - Cel foreign cadastral income which will determine the deemed rental value of the foreign real estate.
Stock exchange tax
The stock exchange tax is a flat-rate tax that is due on transactions (i.e. purchases and sales) of stocks and bonds as well as on redemptions of capitalisation shares of collective investment vehicles that are executed by Belgian residents through Belgian or non-Belgian financial intermediaries. The tax rates vary from 0.12% to 1.32% depending on the type of transaction. The tax is automatically withheld at source in case the transaction occurs through a Belgian financial institution. Otherwise, in case the foreign bank does not comply with its withholding and reporting obligation, it is the beneficiary's responsibility to report the transaction and pay the tax.
Other non-income taxes
Purchases and transfers of real estate located in Belgium, including buildings (except new buildings, which are subject to VAT as described above), are subject to registration duty at the rate of 12.5% of the higher of transfer price or fair market value in the Walloon and Brussels Regions. In the Flemish Region, the applicable rate is 10%. Since income year 2017, the Brussels Region has introduced an exemption of registration duties for the first EUR 175,000 provided several strict conditions are met.
In case the purchase or transfer of land is subject to VAT, no registration duties will be charged on this purchase or transfer.
In principle, no registration duty is due upon a capital contribution; only a fixed fee of EUR 50 is due.
Stamp duties are due on transactions relating to public funds that are concluded or executed in Belgium, irrespective of their (Belgian or foreign) origin, to the extent that a professional intermediary intervenes in these transactions. Exemptions for non-residents and others are available.