Belgium taxes its residents on their worldwide income, irrespective of their nationality.
Residents of Belgium are taxable on their worldwide income, while non-residents are only taxable on Belgian-source income.
Personal income tax (PIT) is calculated by determining the tax base and assessing the tax due on that base. Taxation is charged on a sliding scale to successive portions of net taxable income. For income year 2023, the federal tax rates range between nil and 50% (see below).
The tax calculation contains two major components, notably the 'federal PIT' and the 'regional PIT'. Pursuant to the 6th Reform, the Belgian regions are now entitled to retain surcharges on 'reduced federal personal income taxation', and also grant tax reductions/tax credits. The tax liability may therefore differ (although slightly at this stage) depending on the region in which the residence of the taxpayer is located on the 1st of January of the respective tax year.
Tax rates are the same for resident and non-resident taxpayers, but some deductions or tax rebates are only granted to non-residents, provided that they earn at least 75% of their worldwide professional income in Belgium.
Personal income tax rates
Tax brackets for income year 2023 are applicable to net taxable income after the deduction of social security charges and professional expenses.
|Taxable income (EUR)||Rate (%)||Tax on bracket (EUR)||Cumulative tax (EUR)|
Tax on investment income
Income from capital includes interest, dividends, or other forms of investment.
Interest and dividends paid out and collected via a Belgian financial institution are, in principle, subject to a flat-rate tax of 30%. Interest from ordinary savings accounts is exempted from taxation up to a limit of EUR 980 (income year 2023). Any interest exceeding this amount is subject to tax at a rate of 15%. Dividend payments are exempted for the first EUR 800.
Foreign interest and dividends collected abroad by resident taxpayers must be declared in their annual tax return for the net amount (after the deduction of the foreign tax withheld at source), and the flat-rate tax is paid on assessment. Please note that pursuant to a decision of the European Court of Justice, communal taxes should no more be applied on these foreign interest and dividends.
Pursuant to a ruling of the Belgian Supreme Court, it is now possible to subtract a part of the French WHTs from the Belgian WHTs that are due on dividends received from those French stocks. Investors can claim back excessive WHTs from the past five years. Please note that this regime only applies to French dividends and cannot be extrapolated to dividends received from other countries.
Local income taxes
For residents of Belgium, communal taxes are levied at rates varying from 0% to 9% of the income tax due. The average rate being 7%. For non-residents, a flat surcharge of 7% is due. In some cases, communal taxes may also be levied on exempted foreign-source income.