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

**SueEllen** · 25 March 2010, 22:16

Originally posted by objacob View Post

Hello SueEllen,
Thanks for your response. Please do not assume that I did not do things that you suggested (google).
Just because the "vast majority" do not need a visa does not mean that the no one would have an idea. As a matter of fact there was an American poster who was discussing his issue somewhere at the start of this thread.

I will leave it to wisdom of Nordic and others who may like to respond with some useful info / suggestion.

I have asked the questions in preparation for my meeting with a Lawyer and Accountant.

Regards,

Jacob

So to put it bluntly you are too lazy to use google and expect an unpaid person to give you the advice you can very easily find yourself.

Try this: http://tinyurl.com/yhf8oga

Now that wasn't hard was it!

**nodric** · 26 March 2010, 09:35

For all the non EU Citizens

Originally posted by objacob View Post

Hello Nordic,
Thanks a lot for your informative post. I need your assistance.

My case is as follows.
1) I am currently an resident Indian national employed for by a telecom company in India.
2) In an attempt to start off on my own I approached couple of companies. I received a favorable response from a company in Belgium. We at present are in discussion of the contract.
3) I have to consult on product development and marketing. I will be working on site in Belgium every alternate month. During the month that I am in India will also help them penetrate the Indian market
4) My family will be based in Delhi and may visit during vacations.
5) I propose to setup a limited company and my company will send me to Belgium .
6) There is a Double Taxation Avoidance Treaty and Social Security Agreement between India and Belgium. The Social Security Agreement states that if I pay Social Security in India. I need not do the same in Belgium. This is for a period of 5 Years.

My querys are as follows
1) What visa do I need for Belgium? From my readings I think that I need a Professional card. Is this correct or the fact that I would be in Belgium only for a month at a time make things easier?
2) What would be the impact of the Double Taxation Avoidance Treaty and Social Security Agreement?
3) Any specific suggestions or Instructions?

Thanks in advance

Regards,

Jacob

For the benefit of the tape, and for those who do not possess a shiny EU passport, I offer the following advice.

A visa to work in Belgium will take anything up to, or exceeding, 1 year to get! Even if you are coming from the most friendly western country, it isn’t going to go fast. If you are coming from what the west terms ‘the developing world’ then it’s going to be a whole lot harder, whatever the rights or wrongs of that

The easiest way to work in Europe, including Belgium, without doing all this hard work yourself, is to get a job with a multi-national who will sponsor your application. Even then, it can take months to get done. I am working with a client on an outsource to India at the moment, and Cap Gemini (arguably quite big and influential) have had significant problems with the Belgian authorities getting Indians into the country on short term work permits, so much so one project has been pushed back 3 months. So if you want to come here as more than a short term worker, and as self employed, I would not hold your breath

A professional card is essential if you intend to work here as a freelancer. You will need a recognised University Degree, plus be able to demonstrate professional qualifications and experience in your trade. No made up bits of paper here!

You will also need to be able to speak one of the national languages to a reasonable standard, and all documentation must be submitted in one of those languages, and any non Belgian language documents will have to be translated in Belgium, by a certified translator.

If an Indian company decides to send you to Belgium on a mission, then it will need to pay your salary and related taxes in Belgium, and be fully registered with LIMOSA. It will also have to apply for a work permit for you, and comply with all of the above. Regardless of double taxation treaties, once you become a resident here, the Belgians will want their slice. Start saving now for the accountancy fees you will have to pay to sort this one out. Belgian taxation is hellishly complex

Finally, if you work for a foreign company, and only intend to come here for 8 days maximum in any one month, no visa or work permit is required. Maximum length of stay restrictions still apply to your total of annual visits however, as do any other tourist visa requirements.

In this specific case, I would suggest the most logical route is to ask the Belgium company who is interested in you, to provide sponsorship.

As my other forum colleagues have noted, this information is extensively covered on the World Wide Intraweb [sic], and many of the answers you seek are in the earlier sections of this post.

I took the time to write this reply to show we care, but we are not your free immigration advice line!

This is the official website of the Belgian immigration service, and includes answers to all your questions. They also have an English language helpline, and will reply by email to your questions, however the latter may take sometime. This is Belgium after all

Good luck in your ventures.

**objacob** · 26 March 2010, 12:27

Dear Nordic,
Thanks a lot for the courteous response. I appreciate it.

It will help me when I will be thrown the typical agency dope during the meeting with the immigration lawyers.

Thanks once again for showing that you care.

Regards,

Jacob

**c0ntr0** · 27 March 2010, 19:01

new contract in Belgium - Non EU

Hi All,
I have read all the posts here and found it very useful! but still wanted a little advise in my case

. bcos my agency wants me to decide very quickly!
I am in UK (but non EU) and got a 3 months contract in Belgium for EUR 480 p/d. My agency advised me to go to Itecs manco for both WorkPermit and the tax thing.

The Itecs gave me the following option for tax:
1) His fees - EUR 330 monthly (Is this high or average?)
2) He will send £450 to my UK personal account so that no tax here.
3) Get a E101 so that my NI is in UK, no SS in belgium (that means is the NI included in the above £450 which means no tax & no NI ?)
4) Make me shareholder and pay me dividends to my UK personal account (is this posible, if so what is dividend % in belgium and is there a limit)?
5) I can claim expense up to EUR 1200 per month which is tax-free (what if I hv more expense, can i claim more?)
6) Finally he calculated anually for 18 days per month and said I will take home net 64% which is still very high than UK

(any tax saving tips here?)

..Now where do the belgium income-tax comes here. I guess it is 55% for my slab? can I take all my monies as dividend as its % is less?

Is this a good deal or is there any other Manco who gives better options...please suggest some if any.

Thanks!

**Zinhem** · 29 March 2010, 07:07

(3rd attempt, board times out).
I've accepted a short 4 monther in Brussels. I thought I'd be in, do the work and out without registering as usual (not my first time).
But the agency says I have to file an official declaration and file a copy with them (is this the Limosa?).

I've been told that technically I am liable for taxes in Belgium if I register at the commune which I must do within 14 days, however less than 90 days they class me as a guest worker, 90-183 days my tax is in the UK with the balance to Belgium, over 183 days tax to Belgium with balance of zero to UK.

I did some quick calculations and the tax I'd lose in 2010 is more than the money I'd make in Belgium, plus accountants costs too. I don't want to do this.

I also don't want to declare my bank accounts, savings, or expose my UK ltd company to the risk of being taxable in Belgium, too lucrative for them to raid my company.

As I say, I normally wouldn't register and there would be no problem, but the agency is forcing me to do this Limosa, so BE have a record of my visit.

Do I bail on the contract? Do I risk it? Are there any legal mancos left?
My gut tells me to bail, reading the threads, the country looks like a money pit that only naive newbies (see prior comment) & stuck contractors should work in.

**surfer** · 29 March 2010, 10:49

Originally posted by c0ntr0 View Post

Hi All,
I have read all the posts here and found it very useful! but still wanted a little advise in my case

. bcos my agency wants me to decide very quickly!
I am in UK (but non EU) and got a 3 months contract in Belgium for EUR 480 p/d. My agency advised me to go to Itecs manco for both WorkPermit and the tax thing.

The Itecs gave me the following option for tax:
1) His fees - EUR 330 monthly (Is this high or average?)

Ask ITECs to explain if there are any company taxes payable other than the 330 Euro fee - particularly compay taxes which you will be paying on behalf of them. They may try to sell you some line that in exchange for a special deal with the tax authorities you have to pay some company taxes which they will withold from your salary. This is in function of your overall gross. This money will disappear into ITECs, you will not be credited as having paid tax or S/S on it because the BTA will never see it (at least they will never see it with your name attached to it). At some point in the future when the ITECs "special arrangement" is ruled illegal by the BTA you may well end up paying tax on this as well as all your other split/dividend income. In any case I advise you to check your payslip/Statement_of_Income very carefully in the first few months.

**nodric** · 29 March 2010, 11:22

Originally posted by c0ntr0 View Post

Hi All,
I have read all the posts here and found it very useful! but still wanted a little advise in my case

. bcos my agency wants me to decide very quickly!
I am in UK (but non EU) and got a 3 months contract in Belgium for EUR 480 p/d. My agency advised me to go to Itecs manco for both WorkPermit and the tax thing.

The Itecs gave me the following option for tax:
1) His fees - EUR 330 monthly (Is this high or average?)
2) He will send £450 to my UK personal account so that no tax here.
3) Get a E101 so that my NI is in UK, no SS in belgium (that means is the NI included in the above £450 which means no tax & no NI ?)
4) Make me shareholder and pay me dividends to my UK personal account (is this posible, if so what is dividend % in belgium and is there a limit)?
5) I can claim expense up to EUR 1200 per month which is tax-free (what if I hv more expense, can i claim more?)
6) Finally he calculated anually for 18 days per month and said I will take home net 64% which is still very high than UK

(any tax saving tips here?)

..Now where do the belgium income-tax comes here. I guess it is 55% for my slab? can I take all my monies as dividend as its % is less?

Is this a good deal or is there any other Manco who gives better options...please suggest some if any.

Thanks!

ITECs operate a scheme similar to running your own company in the UK (or other EU country) as I described earlier in this thread.

However, the costs are very high, and the net retention is never as great as they would have you believe. They have to pay your taxes in Belgium on the salary aspect, and the social security can only be paid back in the UK if they successfully register you as an expat in Belgium, i.e. the Belgians have to approve. Again this is described in this thread.

Also be careful as many people have reported to me that hidden charges tend to appear in the running of your account. e.g. Admin charges for whatever they make up. Having read the reply from SURFER, I would suggest you listen very carefully to his advice!

The balance of the income stays in the ITECs bank account, and is actually their money and not yours! This is the risk bit. They have to do this otherwise you would be taxed on it as personal income.

Paying you dividends is fine, but this only avoids social security so taxes are due wherever you end up being classed as tax resident. If you are still in Belgium at the time, this could be classed as Belgium and they’ll take a healthy slice. Problem is the ITECs way is to pay it to the UK and not tell the Belgians.

Also be very careful. ITECs will retain a big slice of your income for payment of tax, personal and corporation, and social security. They will keep this in their bank account for as long as they can, as tax is only payable annually in Belgium, and is calculated 2 years in arrears. RISK – If they go bust, or simply don’t pay it, then you will still get the bill. Also, if they take too much as a retention against future tax, and they always take more than less, then will you ever get the refund from them?

I also note you are a NON EU National. Are you allowed to work in Belgium? Does you visa permit this, or do you only have a permanent right to remain in the UK? A UK work permit does not grant you rights to work in Belgium, or anywhere else for that matter. Also what will you tell the UK taxman about the source of this Dividend income? Do you intend to declare it there? If you start fiddling Hector you may loose your status in the UK. Bad thing

In the end, I have never liked how ITECs operate, and everyone I know whose used them, complains they never got the net they expected.

.

**nodric** · 29 March 2010, 11:46

Originally posted by Zinhem View Post

(3rd attempt, board times out).
I've accepted a short 4 monther in Brussels. I thought I'd be in, do the work and out without registering as usual (not my first time).
But the agency says I have to file an official declaration and file a copy with them (is this the Limosa?).

I've been told that technically I am liable for taxes in Belgium if I register at the commune which I must do within 14 days, however less than 90 days they class me as a guest worker, 90-183 days my tax is in the UK with the balance to Belgium, over 183 days tax to Belgium with balance of zero to UK.

I did some quick calculations and the tax I'd lose in 2010 is more than the money I'd make in Belgium, plus accountants costs too. I don't want to do this.

I also don't want to declare my bank accounts, savings, or expose my UK ltd company to the risk of being taxable in Belgium, too lucrative for them to raid my company.

As I say, I normally wouldn't register and there would be no problem, but the agency is forcing me to do this Limosa, so BE have a record of my visit.

Do I bail on the contract? Do I risk it? Are there any legal mancos left?
My gut tells me to bail, reading the threads, the country looks like a money pit that only naive newbies (see prior comment) & stuck contractors should work in.

LIMOSA is law now. Some pimps won’t care, but most do. Put simply this is the Belgian SS ensuring that you don’t slip through the net. To register you need a recognised University Degree. You will then get a National Number, and in due course a tax return. If you don’t have a permanent address in Belgium, e.g. just a Hotel, they’ll want your UK address.

You only register at the Commune if you have a rented home. The Commune will send you away if you are simply here Mon-Fri in a hotel.

You will also need a Belgian accountant to file your returns in Belgium! If you work here as self employed you need to register locally for VAT as well. This applies from day 1 as there is no threshold in Belgium.

My advice if you can’t do it in the Black, and you want to avoid Belgian accountancy headaches, or involving your UK LTD, then bail on the offer.

You can legally work here through your UK LTD as I described in this thread, but this has its own headaches.

You can also work through a simplified company structure known as a COMM V. This is set up and run by an accountant, and avoids all the hassles of a local LTD Co. However, you are then fully visible to the locals, and have to pay tax and SS here from day 1. You also need two people to act as Directors, one who is only liable for the setup capital of 1000 Euros, the other is you, and liable for all debts. This can be setup and taken down rapidly, so is an option.

There are Mancos still around, but if the Pimp wants LIMOSA you’re buggered anyway. I’d be tempted to go back to the pimp and tell them you will fulfil the contract through your UK LTD, and that LIMOSA does not apply. Tell them that if the contract extends beyond 183 days, that your UK LTD will then apply for LIMOSA for you as its worker overseas. Declare the monies into your UK LTD and pay tax in the UK.

If, and it’s a BIG IF, the Belgies ever catch up to you, just send them a copy of your UK tax return and claim double taxation treaty applies. The only way they will ever catch up to you, is if you tell them you’re working here. Whilst this is not strictly playing by the rules, it’s better than bunging it all in an offshore account, and not paying anything anywhere.

.

**c0ntr0** · 30 March 2010, 19:47