Freelance tax higher in Belgium?

[acis]

SPRL on 6K+ ?

Yes, but prob on Thu/Fri as I do have a set of figures produced by an accountant. V small salary, v big expenses should do the trick.

How do you get 20% (1200) expenses - car, parking, utilities etc, rental of office space etc?

I am looking into some initial investments that would take care of a good part of it a certain period of time. Car (buy one), parking, utilities, internet, phone bills, furniture (to buy), plane tickets, meal tickets, other IT expenses that I have postponed up until now. Also put some money into health assurance.
Rental of Office space is a belgium St. Grail... everybody talks of it but in reality it can't be put in place … cannot deduct office as the landlords are aware and forbid it by contract. I'll rent a virtual office most likely. This can be handled if looking a bit further into buying a property on the company expenses ... but there's a lot of research to make and belgium is not exactly the place to get straight answers on simple problems.
All together I would be content with a 66-70% retention, but I guess one can go close to that if not taking home dividends. A 36K salary after ripped off on taxes would keep one alive (rent and pocket money) but would not pay home mortgage.
I would really appreciate some figures as all I could get from several accountants was global estimation and lots of ifs. I am also meeting another accountant next week. I'll share further specs.

Thanks again!

P.S. BTW can anybody tell me how to PM on this forum?

[LostInBrussels]

I am looking into some initial investments that would take care of a good part of it a certain period of time. Car (buy one), parking, utilities, internet, phone bills, furniture (to buy), plane tickets, meal tickets, other IT expenses that I have postponed up until now. Also put some money into health assurance.
Rental of Office space is a belgium St. Grail... everybody talks of it but in reality it can't be put in place … cannot deduct office as the landlords are aware and forbid it by contract. I'll rent a virtual office most likely. This can be handled if looking a bit further into buying a property on the company expenses ... but there's a lot of research to make and belgium is not exactly the place to get straight answers on simple problems.
All together I would be content with a 66-70% retention, but I guess one can go close to that if not taking home dividends. A 36K salary after ripped off on taxes would keep one alive (rent and pocket money) but would not pay home mortgage.
I would really appreciate some figures as all I could get from several accountants was global estimation and lots of ifs. I am also meeting another accountant next week. I'll share further specs.

Thanks again!

P.S. BTW can anybody tell me how to PM on this forum?

Having considered the option of buying a house under the company name in Brussels, I have been advised it's not always worth it. It's harder to get a mortgage and you end up paying more tax when you sell. It might be an option to purchase it under your personal name and rent it on to your company. Or, even purchase it so that a percentage belongs to you personally and a percentage belongs to the company.

I am unable to PM anyone. I think it's cos im a newbie.

<mod note>Yup, have just asked fo your account to be upgraded, give it 20 mins and try the PM system again!</mod note>

[Rantor]

The example below equates roughly to the 6k per month you mentioned. I’d make the following comments:
1. The personal tax would be lower if you have kids and/or your other half is skiving off work (joint declaration=use their tax allowance)
2. The personal tax would also benefit from other deductions for some personal expenses and mortgage tax relief is quite interesting (though co wee bit complicated)
3. The expenses shown for the company could be more, could be less. Group assurance would bump it up, as would buying running a car, utilities etc.
4. If you leave the dosh in the company, and don’t take a divi, then you benefit from layered corporation tax rather than the flat rate of 34%
5. The retention tax drops to 10% if you leave the money in the company till you wind it up

For my situation it looks like a 72% retention, maybe a bit more according to my accountant.


Daily rate € 330.00 Yearly 220 € 72,600.00

Gross € 72,600.00
salary € 30,000.00
expenses € 14,400.00 (1200 per mon)
€ 28,200.00
cooperation tax 34% € 9,588.00
€ 18,612.00
witholding tax 15% € 2,791.80
net/dividend € 15,820.20

salary gross € 30,000.00
tax € 7,800.00
social security € 4,700.00
net € 17,500.00

Total revenue: net + expenses 66% € 47,720.20

[Brussels Slumdog]

Missing parameter- Employer Contributions

The example below equates roughly to the 6k per month you mentioned. I’d make the following comments:
1. The personal tax would be lower if you have kids and/or your other half is skiving off work (joint declaration=use their tax allowance)
2. The personal tax would also benefit from other deductions for some personal expenses and mortgage tax relief is quite interesting (though co wee bit complicated)
3. The expenses shown for the company could be more, could be less. Group assurance would bump it up, as would buying running a car, utilities etc.
4. If you leave the dosh in the company, and don’t take a divi, then you benefit from layered corporation tax rather than the flat rate of 34%
5. The retention tax drops to 10% if you leave the money in the company till you wind it up

For my situation it looks like a 72% retention, maybe a bit more according to my accountant.


Daily rate € 330.00 Yearly 220 € 72,600.00

Gross € 72,600.00
salary € 30,000.00
expenses € 14,400.00 (1200 per mon)
€ 28,200.00
cooperation tax 34% € 9,588.00
€ 18,612.00
witholding tax 15% € 2,791.80
net/dividend € 15,820.20

salary gross € 30,000.00
tax € 7,800.00
social security € 4,700.00
net € 17,500.00

Total revenue: net + expenses 66% € 47,720.20

Questions for your accountant.
1Where is the Employer Social security contribution at about 34%?
If I have a salary of €30,000 my employer pays about 15000 so my
real Gross is about €45000.
Its expensive to employ people in Belgium.

Gross 72600
Salary -30000
Employer Soc security -15000
Expenses - 14400
13200
cooperation tax 34% -4488

8712
witholding tax 15% -1307
net 7405
2 Who owns the car you or your company?
If your company owns the car then you as an employee receive a benefit.
There may be tax to pay on this benefit.

3 Your calculation should be Total revenue: net + expenses 54% € 39305
but If you have actually spent 14400 then you only benefit by 4900
as this is the amount you would have paid in tax if you had not spent the 14400
Total revenue: net + 4900 = 41% € 29805

[CyranoB]

I can try to answer:

1) it's not legal to be employee of a company you own and run. You have to be 'indépendant' so no 35% employer taxes.

2) the company owns the car (lease it, buy it or bring your own car in the company) and pays for running it (insurance, maintenance, gas, etc.) all of this can be deducted and VAT claimed back. You'll have to pay some taxes for it but it's nothing compared to buying and running you own car. That's how local contractors pay for their Porsche...

[Rantor]

I can try to answer:

1) it's not legal to be employee of a company you own and run. You have to be 'indépendant' so no 35% employer taxes.

2) the company owns the car (lease it, buy it or bring your own car in the company) and pays for running it (insurance, maintenance, gas, etc.) all of this can be deducted and VAT claimed back. You'll have to pay some taxes for it but it's nothing compared to buying and running you own car. That's how local contractors pay for their Porsche...

Its more or less that, there are a few odds n' sods that you get stung for IIRC 35% emp charges on director salary is not one of them.

For the car, it is normal for a 4 or 5 yr right-off (3 if you are doing mega kms) You get 50% of the Vat back straight away.

Also, there are a lot of ways to reclassify cash going from yourco to you plus penalties for various disallowed expenses relating to cars etc.

One thing to avoid, is paying yourself a big salary - ouch.

[Brussels Slumdog]

SPRL or indépendant

[QUOTE=CyranoB;868544]I can try to answer:

1) it's not legal to be employee of a company you own and run. You have to be 'indépendant' so no 35% employer taxes.

Does this mean that you first create a SPRL and then set yourself up as
an indépendant or first indépendant then later create an SPRL?

Then social security equals 21% € 6300 or minimum of €620 quarter.

salary gross € 30,000.00
social security 21% € 6300

[CyranoB]

Yes you first setup the company and setup yourself as independant.