Contracting in Belgium - A Short Guide to Tax and Social Security

[avamaria]

As regards being taxable on WORLD WIDE income after the 183 day rule working via a UK LTD , this surely means the EMPLOYEES world wide income? How can the Belgian tax authority legitimately tax the bank interest earned on the the employer's company's bank balance? At what point can a UK LTD become a Belgian company? How can a UK LTD become a Belgian company just because one of it's employees has worked/resided in Belgium for more than 183 days? Doesn't make sense to me?

[avamaria]

OK Having read more I understand that it is to do with the relationship of the person working in Belgium being a director of the company and so as the director and sole manager if you like, works in Belgium then the Company effectively becomes Belgian (after 183 days in the Belgium - BTW this included travelling days. So flyng on a Sunday would count as one of the 183. Flying in Sunday night and leaving Thursday evening is 5 days!)

[BlasterBates]

OK Having read more I understand that it is to do with the relationship of the person working in Belgium being a director of the company and so as the director and sole manager if you like, works in Belgium then the Company effectively becomes Belgian (after 183 days in the Belgium - BTW this included travelling days. So flyng on a Sunday would count as one of the 183. Flying in Sunday night and leaving Thursday evening is 5 days!)

No don't get fooled by the 183 day rule that doesn't apply to businesses. For example you pick up a load in Antwerp and drop in Liege that's taxable even if you are a self-employed lorry driver from the Netherlands. That's a specific rule for lorry drivers. Basically there is a limit of 5 days a month for business trips anything beyond that would be taxable as a business in Belgium. The 183 day rule would mean all your other income would be taxable. So let us say you do most of your work in the UK but pop over to Belgium, that's fine, but if you're working in Belgium then you should tax it in Belgium.

[avamaria]

183 days

Hi ,

I guess I need to get professional advice on that once and for all it is clear to me that people on this forum are operating their LTD from the UK which is sending them to Belgium and it is assumed the 183 rule applies to their Monday to Thursday (in-out).

About the UK LTD effectively becoming a Belgian company (which your suggesting starts from day 1) I would then expect the company to benefit from the allowances etc that a Belgian company is granted which I understand are quite substantial.

It seems to me that there is no compliant tax efficient way to work in Belgium. I'm face with working through my own LTD for 6 months (which you seem to suggest is not now going to work as I imagine as it will be belgian taxable on all its income from day 1) or I go with a dodgy management company whom I'd rather not having worked with these people before over the years in Germany, Belgium (ITECS) and France. Why are these companies still around? The only reason I can think of is that they have covered themselves legally but have duped the contractor in to believing that their way is compliant for them also until the tax man comes knocking. I think I will try and operate through my LTD as I know of no other compliant way.

Of course I could open a Belgian company but that is something that is not on my radar at the mo but would seem the only compliant tax efficient way to operate in Belgium. The whole situation is really frustrating even for someone who has be working around Europe for over 12 years.

[avamaria]

Dividends in Belgium

Any one familiar with the argument that a belgian company can pay dividends into another country for a non-resident and that this does not count as Belgian income . Apparently according to some ManCos as this is legitimate as long as you are non-resident and therefore do not have to pay tax in world wide income. I know I know this sounds like dump question and I'm inexperienced in these matters but I would like to hear your reactions and I would like to know if any of you have any contact details (belgian accountants, BTA etc )that I can use to verify this.

thanks

[Boo]

OK Having read more I understand that it is to do with the relationship of the person working in Belgium being a director of the company and so as the director and sole manager if you like, works in Belgium then the Company effectively becomes Belgian (after 183 days in the Belgium

Well, the BTA will tax you as if the company Belgian, but it is not a Belgian company in any other sense.

BTW this included travelling days. So flyng on a Sunday would count as one of the 183. Flying in Sunday night and leaving Thursday evening is 5 days!)

That's not my understanding of Belgian law. I spoke to a Belgian accountant when I was in the same situation and I was told that the relevant days that are counted are only working days and excluding travelling days. As I travelled on Sundays and Thursdays this meant I could effectively ignore the 183 day rule.

Boo

[Boo]

No don't get fooled by the 183 day rule that doesn't apply to businesses. For example you pick up a load in Antwerp and drop in Liege that's taxable even if you are a self-employed lorry driver from the Netherlands. That's a specific rule for lorry drivers. Basically there is a limit of 5 days a month for business trips anything beyond that would be taxable as a business in Belgium. The 183 day rule would mean all your other income would be taxable. So let us say you do most of your work in the UK but pop over to Belgium, that's fine, but if you're working in Belgium then you should tax it in Belgium.

This is complete nonsense that you persist in reposting. I am curious to know where you get it from ? I have specifically obtained advice in the past from a Belgian accountant who clearly gave the advice in my post above. The 183 day rule is European law, and cannot be overridden by any Belgian laws.

Boo

[Boo]

I guess I need to get professional advice on that once and for all

Good plan. Go and see a local Belgian accountant. I asked the proprietor of my B&B who he used, professional Belgians pretty much all speak good English so you should have no trouble. Obtain advice about the 183 day rule as it applies to your circumstances.

it is clear to me that people on this forum are operating their LTD from the UK which is sending them to Belgium and it is assumed the 183 rule applies to their Monday to Thursday (in-out).

As I said, the Belgian interpretation of the 183 day rule is the same as what used to apply in the UK : working days only are counted but not those days when travel occurred.

It seems to me that there is no compliant tax efficient way to work in Belgium. I'm face with working through my own LTD for 6 months (which you seem to suggest is not now going to work as I imagine as it will be belgian taxable on all its income from day 1) or I go with a dodgy management company whom I'd rather not having worked with these people before over the years in Germany, Belgium (ITECS) and France. Why are these companies still around?

You can work through your own UK Ltd Co for 183 days per year in any country in the EU. The advice the temptingly named BlasterBates has given you is incorrect. The only explanation I can think of for his persistence in spouting his brand of nonsense must be that he is related to an Umbrella or dodgy MC as you put it.

You should not use an umbrella or DMC in Belgium. The number of times they have been proven to be crooks is beyond belief : they will lie to you about your tax situation, short change you by taking more than the agreed percentage, they will withhold sums with paltry excuses about 13 month years, they will rook you rotten. And you have no guarantees they will pay the tax they say they will pay on your behalf. If they spend it on beer and then fold leaving behind only a trail of false addresses you will have no comeback. And the BTA will be on your back for the missing tax. Trust me, you really don't want a Belgian Umbrella or DMC.

Of course I could open a Belgian company but that is something that is not on my radar at the mo but would seem the only compliant tax efficient way to operate in Belgium. The whole situation is really frustrating even for someone who has be working around Europe for over 12 years.

You only need a Belgian company if you rent a house or flat in belgium (as opposed to staying in a hotel) and if you outstay the 183 days rule.

As I said above, it's pretty easy to meet a Belgian accountant, do that and listen to what s/he says.

Good luck,

Boo

[portugueseinbelgium]

help...

Hi,

In my quest to solve a problem that I don't know if I have, because in Portugal everytime I call the Financial Authorities they tell me something different, and my accountant is making things too simple, as is my hiring company in Belgium, I have found this website.

I am not Brittish, I am a Portuguese national but I have found this forum to be very helpful and have knowledgeable people here! So I ask you to please answer my questions, as I'm in quite a bit of despair right now.

Got a job offer for a 290€/day rate in Brussels. Hiring company (reputable north american consulting company in IT), made it quite simple:
1 - Take a permanent contract with them.
or
2 - Come to Belgium with your portuguese company for 6 months maximum. After that time I would have to either take a permanent contract, go freelancer, or open a company in belgium.

If I knew then what I know now I would have taken the 1st choice.


Facts:

1 - Starting on the 6th of February. I will move tomorrow to Belgium. Too late to say no to the offer.
2 - I have a one-man company in Portugal. I am the sole shareholder and sole manager at this point. Opened in January 2012 and worked for it around 3 weeks while in Portugal.
3 - I have a wage and a per diem rate to support my stay in Belgium.
4 - I stay 7 days a week in Belgium and I will rent a flat.

Questions:
1 - Should I tell Portugal I am going?
2 - Should I inscribe in Limosa (i think so).
3 - Does the 183 days rule apply to companies?

4 - Situation A:
If after little less than 6 months I decide to come back home to Portugal and leave Belgium: will the Belgium authorities tell my company to pay taxes there?

5 - Situation B:
If after 6 months I close my company in Portugal and decide to take a permanent job contract in Belgium: will I have to pay IPF (Impot des personnes physiques) in Belgium for what I received from my Portuguese company in 2012? Will my company be expected to pay its taxes in Belgium instead of Portugal, for those 6 months (center of vital interests) ??

Please, shed me some light on this.

I think my first think on arriving in brussels will be finding a place and finding an ACCOUNTANT. Could you refer me to a good accountant in brussels? How much would it cost to ask him a few questions?

[Boo]

Facts:

1 - Starting on the 6th of February. I will move tomorrow to Belgium. Too late to say no to the offer.

You say this is a fact, but if the contract is with your Portugese company rather than with you personally, and if that company has no or few assets (being 3 weeks old I guess this is the case ?) then you could decide not to go and nothing bad could happen to you at all. But if you feel you must go then :

Questions:
1 - Should I tell Portugal I am going?

I don't know what Portugese law says, but in the UK there is no requirement to tell HMRC that you will be working abroad. EU law says you can work abroad through your company for 183 days before you are liable for tax in that country so if the contract will run for less than 183 days you should be able to take the income as effectively earned in Portugal for tax purposes.

Questions:
2 - Should I inscribe in Limosa (i think so).

Yes, you need to register both your Portugese company and yourself personally under Limosa. If there is an agency involved they will likely insist on proof of this but the end client may be more relaxed about it. It is possible to register retrospectively and afaik nothing bad happens if you do that. (I did and nothing bad happened to me).

3 - Does the 183 days rule apply to companies
4 - Situation A:
If after little less than 6 months I decide to come back home to Portugal and leave Belgium: will the Belgium authorities tell my company to pay taxes there?

Yes, in fact the 183 day rule is specific to companies : any company in the EU may send a member of staff to another EU country to work for up to 183 days without that member of staff falling under its tax laws. If you work less than 183 days then you should not receive a tax return from the BTA and they will not say anything to the Portugese tax authorities about your earnings in Belgium. Aiui, it is not Limosa which means you are sent a Belgian tax return it is registering at the local commune in Belgium which you are required to do unless you are staying at a hotel or bed & breakfast.

Questions:
5 - Situation B:
If after 6 months I close my company in Portugal and decide to take a permanent job contract in Belgium: will I have to pay IPF (Impot des personnes physiques) in Belgium for what I received from my Portuguese company in 2012? Will my company be expected to pay its taxes in Belgium instead of Portugal, for those 6 months (center of vital interests) ??

I don't know for sure what the answer to this question is. I believe you can work the 183 days and then if renewed at the end you can get up to the previous 6 months of expenses allocated to the new Belgian company you start. You need to ask a Belgian accountant about this because there several different types of Belgian company and the details may depend upon which type you start.

Of course you could argue that the contract with your Portugese company is entirely distinct from that of your new Belgian company and just tax your first 6 months in Portugal and earnings after that in Belgium. I don't know what the BTA will think about that though...

I think my first think on arriving in brussels will be finding a place and finding an ACCOUNTANT. Could you refer me to a good accountant in brussels? How much would it cost to ask him a few questions?

You can find an accountant by using google, pick one near your office or flat then it will be easy to visit them. I was not charged for my initial meeting where I explained my circumstances and would not expect you to be either. Out of Brussels I was quoted €100 per hour for accountancy services, but you can always ask the price when you phone to arrange a meeting.

Good luck,

Boo