Working in Belgium - Independent vs Full employment in Belgium

[belgium_contractor]

Dear Sir/Madam,

I am a UK national living and working in Belgium since November 2008 (just over 6 months or 183 days). I have however travelled outside of Belgium on weekends and public holidays. I am currently working through my UK limited company and invoicing the company I have a contract with who are based in Luxembourg. I am however working in Belgium. On paper however my contract is with a company based in Luxembourg.

Before I started my contract in Belgium in November, I registered with Limosa (this was a pre-condition set by the Luxembourgish company). They also told me that the 183 days is calculated by adding the total no of days I've worked (excluding holidays and weekends). I have subsequently learnt that this is not the case and I was furious with them for gving me misleading information.

So the situation is such, I have worked in Belgium technically for over 183 days, I haven't registered with the Commune or any govt body, although I do have a bank account and as mentioned before registered with Limosa. I have just one client in Belgium and my contract has just been extended for another 10 months. I don't know what is the best way to operate in Belgium.

As I understand it, these are my options:

1) I can continue to work through my UK company and pay taxes in UK and not Belgium (tempting option but risky). I understand I will personally become a Belgian resident. Am I right in thinking that I will then also be bound by Belgian tax rules on monies earned from the company? and it could also be argued that I have a branch in Belgium and therefore that the company has become resident in Belgium. I would then have to register for Belgian VAT as well as other belgian taxes? With this option I just have to accept that there may be problems with the Belgian tax authorities later on, or

2) Take up full time employment in Belgium and take a big cut in salary. (not my preferred option)

3) Seek advice form a belgian accountant and go down the 'Independent' route work through this setup, leaving the UK company dormant until I recommence working in the UK. (need some advise here)

Can anyone reccommend a BELGIAN accountant who will be able to provide professional advise? How do I become Independent in Belgium? Please, please be gentle with your reply. This is my first post and I am really hoping you would help.

I am beginning to think that the 3rd option is the best way forward. I was trying to get an idea of what you think. Please let me know if this is a tax-efficient and more importantly a better option than to take up full time employment in Belgium? I don't want to pay the taxman half of my salary. I am single and don't have any kids. I don't mind paying taxes in Belgium provided they are not over 40% in total.

Any help or advise to point me in the right direction would be much appreciated.

Thanks and Regards,
Allan

[Brussels Slumdog]

Option 3

Dear Sir/Madam,


I am beginning to think that the 3rd option is the best way forward. I was trying to get an idea of what you think. Please let me know if this is a tax-efficient and more importantly a better option than to take up full time employment in Belgium? I don't want to pay the taxman half of my salary. I am single and don't have any kids. I don't mind paying taxes in Belgium provided they are not over 40% in total.

Any help or advise to point me in the right direction would be much appreciated.

Thanks and Regards,
Allan

Allan,

Option 3

But

You cannot avoid paying the taxman and the social security man more
than 50% of your salary based on 'Independent' only.
As 'Independent' only you will pay 32% Social security + up to 50%
taxation.

Your expenses deductions will be limited ie travel expenses.
Your visits home will be non deductable as Belgium will be home.

You will need either your own limited Company plus Independent
or

A management companies Limited company plus independent.
( You will need to assess the risk as most Management companies operate in a grey area)
This normally involves a fee of about €500 a month.

Belgium has one of the highest tax rates in europe and the most difficult country to operate as
a contractor which makes it very lucrative for Management companies.

Use the search facility of the site to find further advise on "BELGIUM".

I hope that you are earning £100 a day more than you would be in the UK
to off set the higher taxation.

[CyranoB]

First, seek professional help, only a Belgian accountant will be able to tell you if what you're planning is legal and tax efficient.

Personally I would do the following:
- still invoice the agency through the British company
- setup as independent in Belgium
- invoice yourself your British company enough for what you need to live in Belgium
- keep the benefits in you company
- give yourself dividends in 10 months when you leave in Belgium.

Again you would have to ask a Belgian (and I guess also British) accountant to see if it feasible and legal and tax efficient.

[fadyg]

Update

Hi there,

Did you end up finding a solution. I am pretty much in that exact situation, and looking for a solution. Either through independent company, or fully salaried.
Regards,
Fady