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

[n00b]

Hi,

So I've got my one man company back in portugal. worked for 2,5years in belgium and just returned, found a job in portugal, and i'm invoicing through my one man company to a portuguese client.

im afraid that belgium is going to ask me for money for taxes for this year (as well as for other years), even if I worked much les than 183 days in belgium in 2014. i wasnt renting an appartment but i did have a bank account...

so i wanted to ask you: is there a way to justify that for 2014 I would be paying taxes in portugal and not in belgium?
- i'm invoicing a portuguese client, and the values are around 1/3 of belgium contract prices, hopefully until end of year. (I dont like the job though so depending on if it makes a diff or not taxwise, I could leave this contract or not).
- i stayed less than 183 days..
- i i wasn't renting in 2014, but i did have a bank account...but i do have bank accounts as well in portugal..

for 2012 and 2013, i'm already expecting they ask me for money so i saved it in a deposit account...

[sal]

It's probably best to ask your accountant about all this, rather than relying on strangers in a UK forum to know the ins and outs of a Belgium and Portugal tax laws.

I can only imagine that the Belgium taxman will want a piece of everything that went into your Belgium bank accounts (Co and personal)

[ASB]

To add to your woes have you met Portuguese withholding taxes yet? They regard them as personal, but it's the company that's paying. You can eventually offset against UK Corp Tax but it took quite a of dialog between my accountants and HMRC.

[Midland White]

Can anyone recommend a reputable tax advisor/accountant in Belgium (who will converse in English). To qualify they must not be selling any schemes or other imaginative accountancy trickery.

TIA
MW

[Scratchy]

Can anyone provide me with the same information on a good accountant and also provide some advice and help?

I used to use Itecs who have now closed so I need to change to another option. I was registered with them for 4 yrs and thought they were legit and my large Belgian agency had 'approved' them. I am about to renew my contract with the same customer but am not sure what the best way is to proceed. I've read some worrying stuff on this forum about Itecs so want to move forward with a better option but do not want to suffer any repercussions from the previous arrangement. I was registered for Limosa but not with the commune.

I am worried if I register as self-employed then the 4 previous yrs may come back to haunt me? Would it be better to work from a UK Ltd company in order not to change the ex-pat status as this will be less likely to flag up any inconsistencies?

Thanks for any advice.

[TF8283]

Tax advisor/accountant Belgium

Did anyone get any good contacts for tax advisor/accountant in Belgium, with reasonable rates?

thanks in advance

[Boo]

So I've got my one man company back in portugal. worked for 2,5years in belgium and just returned, found a job in portugal, and i'm invoicing through my one man company to a portuguese client.

im afraid that belgium is going to ask me for money for taxes for this year (as well as for other years), even if I worked much les than 183 days in belgium in 2014. i wasnt renting an appartment but i did have a bank account...

so i wanted to ask you: is there a way to justify that for 2014 I would be paying taxes in portugal and not in belgium?
- i'm invoicing a portuguese client, and the values are around 1/3 of belgium contract prices, hopefully until end of year. (I dont like the job though so depending on if it makes a diff or not taxwise, I could leave this contract or not).
- i stayed less than 183 days..
- i i wasn't renting in 2014, but i did have a bank account...but i do have bank accounts as well in portugal..

for 2012 and 2013, i'm already expecting they ask me for money so i saved it in a deposit account...

You say you were working in Belgium through your Portugese company for 2.5 years so you will need to pay Belgian taxes on those earnings, unless you worked for fewer than 183 days in each of the 2.5 years.

If your new contract is performed entirely outside Belgium then you should not have to pay Belgian taxes on that income provided you are resident outside Belgium.

As for paying tax on your Belgian earnings for the years before, although in theory you should do this, you will only be asked if the Belgian tax authorities find an address for you to serve the demand. Did you register with the commune in Belgium where you lived ? How about registering with Limosa ? If they don't know about it you may get away scot free but if they find out thay will pound your ass with a big fiscal stick...

Boo

[ajc001]

What tax steps do I need to take?

Hello Forum
My circumstance is that I have been offered a contract to work for a global US/UK company and I am trying to determine just how much tax I will have to pay in the UK and Belgium all told.

For the purposes of demonstration, lets assume over the next year that:-

• I am invoicing a uk based employment agency, who are invoicing a belgian based service provider who is providing my services to the client, where the client is a
  
  global US/UK company with offices in Belgium.
• My contract is between uk based employment agency and my uk based company and is for 1 year,
• I invoice the uk based employment agency monthly,
• The yearly income to my company through these invoices is 100K euros.
• I pay myself as an employee of my UK company a salary of 20k euros
• I have employee expenses of 20k euros
• I take dividends as a director of my UK company worth 50k euros

Having read much of this enormous thread my current thinking based on the advice I gleaned from the first 5 or so pages is as follows:-
This is what I think I am supposed to do and the issues I have:-

1. Form a bog standard UK company, with me as director and the only employee. My wife daughter or son may have peripheral roles - what is allowed, suggested etc...
2. Obtain the services of a UK accountant. Some say I will also need a belgian accountant - is this mandatory or advised. I wish to avoid the extra expense if
   
   possible. Suggestions!
3. Join a UK bank that will take euro payments. Is this necessary or can it just be a normal uk business bank account. Can I insist/request that the uk based
   
   employment agency pay me in sterling?
4. Register to become an expat - to avoid local belgian social security(SS) and to pay local belgian income tax on salary (ie. ?% tax on 20k salary employee of
   
   my UK company). Are those assumptions correct re. SS and belgian income tax?
5. Pay UK NIC on 20k euro salary
6. Maintain the UK as my companies centre of economic interest. This is difficult for me to achieve - as the services I will be providing in Belgium will be for the
   
   usual 220 days (e.g. approximately 220days = 365days - [weekends and 40 days hols]), so there wont be any other UK invoices. I do have 2 low earning adult children and
   
   a wife that I suspect could assist in reducing the tax burden but I dont know how.
7. Pay uk corporation tax on uk company dividends at 20% of dividend total(e.g. 20% of 50k = 12.5k euros)
8. Submit UK company tax return at end of year.

As is, I am assuming with 100k invoiced that my tax liability is approximately as follows:-
Belgian income tax at ??? % on 20k euros = 4k (if income tax is 20%. ) What is the rate???
UK NIC on 20k euros = 2k euros (if NIC is about 10%)
UK corporation tax = 12.5k euros
Total tax liability = 18.5k euros

Have I missed out any tax factors in the above list?
Are there any major tasks that I have omitted - like when to rent an apartment for residency status purposes, what type of residence I should use - flat, house,

airbnb, whether to get a European bank account, recommended accountants that are specialists in my requirement?

Please feedback if this all makes sense or where I am going wrong

I am due to sign my contract imminently - so a speedy response would be appreciated even if it is just a brief response.

Thanks in advance and in desperation
ajc001

[Boo]

I am not going to make any attempt to answer all your queries as there is a fundamental issue you need to address first :

€100k is not enough to pay for a UK based person to live and work in Belgium. Consider :

Scale rates for Belgium (see the downloads from this HMRC web page) amount to €241 per day in Brussels or €193 pd elsewhere.

This is the amount that HMRC believe it will cost you to stay in Belgium (excluding travelling expenses) and if you stay away in Belgium for 5 days it totals €46k outside Brussels and €58k in Brussels based on a 48 week working year.

This leaves you a mere €50k odd and you will have to pay travelling costs out of that as well as the cost of maintaining your UK house / flat / whatever. Whatever tax you end up paying will come out of the €50k too, so you decide whether it is worth it...

You need to run, not walk away from this contract and the tax aspects are the least of your worries.

However, to somewhat address your queries, you first need to provide some details. For instance,. are you currently resident in the UK ? If not then you should not be thinking of starting a UK Co just to work in Belgium, IMHO. Also, how many days in the year will you be onsite in Belgium ? If it is less than 183 days in any period starting Jan 1 and ending Dec 31 then you will not be liable to pay tax in Belgium if you do work through a UK Co.

But honestly, ajc001, there is no realistic prospect of surviving a year abroad on a poxy €100k and you need to give up the idea unless you can get the price up to at least twice that.

If you don't believe me then please go out on the web and cost it all up : food, accommodation expenses in Belgium, accommodtion expenses in the UK, travel costs, time spent travelling, etc etc. You will be surprised what the total amounts to.

And it is a mistake, IMO, to assume that you can do better than scale rates just by renting a flat : most private accommodation in Belgium is let on a minimum 2 year contract. Of course if you speak to the landlord they will say that you may negotiate an early exit but you will pay all their re-advertising costs and any time during which the place is un-let in the 2 years will be on your account too, so...

Good luck whatever you decide,

Boo

[ajc001]

Response to Boo

I am currently resident in the uk and have been all my working life (20+ years).

My actual projected income is approximately 150k euros per year - assuming I work 221 days per year in Belgium from Feb 22nd 2016.

On that basis are you able to advise?