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

[lindsay~]

Another scenario!

First, many thanks to Nodric for this fantastic and informative post.

I have another scenario. I have a UK Ltd company and reside with my family in the UK. I'm considering a contract that has been offered by a UK Agency for a position in Belgium. The Client wants me to be present for sometime in the Belgium office but also wants me to work from home. Looks like its going to be a 50/50 split between Belgium and home in the UK. The contract is for 6 months but the Agent has hinted that its likely to go on.

With this working from home arrangement I work out that I definitely won't go over 183 days not counting travel in and out days and more than likely won't go over the 90 days. (26 weeks x 3 days is only 78 days)

I'd very much like to just continue to pay tax in the UK and not fall into the Belgium system - do you think this is possible/legal?

I've got another opportunity in the UK (same rate)which I've half closed the door on but I'm wondering now whether I should ditch all this red tape and get my foot back in the UK contract door.

Thoughts?

[nodric]

First, many thanks to Nodric for this fantastic and informative post.

I have another scenario. I have a UK Ltd company and reside with my family in the UK. I'm considering a contract that has been offered by a UK Agency for a position in Belgium. The Client wants me to be present for sometime in the Belgium office but also wants me to work from home. Looks like its going to be a 50/50 split between Belgium and home in the UK. The contract is for 6 months but the Agent has hinted that its likely to go on.

With this working from home arrangement I work out that I definitely won't go over 183 days not counting travel in and out days and more than likely won't go over the 90 days. (26 weeks x 3 days is only 78 days)

I'd very much like to just continue to pay tax in the UK and not fall into the Belgium system - do you think this is possible/legal?

I've got another opportunity in the UK (same rate)which I've half closed the door on but I'm wondering now whether I should ditch all this red tape and get my foot back in the UK contract door.

Thoughts?

Officially, and taken from the LIMOSA website.

Self-employed business people
Self-employed business people are exempt from the declaration if they do not stay in Belgium for more than 5 days per month for their activities.

Company self-employed directors and mandataries [sic] are also exempt if they take part in meetings of the Board of Directors and company general meetings. They, too, may not stay in Belgium for more than 5 days per month.

--End Quote

Registering for LIMOSA does not mean you have to pay Belgian taxes and Social Security, but IT DOES mean you will have to file a local tax return in the local language. This mandates a local accountant, unless you are very talented

I have mentioned this previously, but be aware that taxes in Belgium are in arrears by 2 years, and social security by as much as 3 years That means that long after your gig here is over, you’ll be getting tax returns and statutory declarations for years to come from the Belgies [sic], in the same way as I had to file UK returns for several years after I left the UK, until I convinced them I was no longer domiciled there, a uniquely British concept

Belgium requires you to declare your Worldwide income, so showing them your tax etc is UK paid, and claiming exemption under Double Taxation Treaties will be necessary

I have written a lot about working through your own UK LTD. As you will only work part time, you could avoid paying personal taxes in Belgium, as the days actually here will be limited. However, it will not be an easy ride if you register for LIMOSA, and you will have to keep detailed records to show your actual days in Belgium.

You could of course allow LIMOSA to slip your mind, assuming the pimp does not care or ask. If you get caught (low risk), you are unlikely to be fined, but you will have a lot of hassle with the local Hector, and end up paying a local accountant a fair sum of cash to sort it all out for you. Not registering is NOT a criminal offence, it will just bring you unwanted attention from the local Hector. If it were me, I’d get LIMOSA amnesia

You should also ensure you have a UK accountant who is well versed on the Double Taxation Treaty between the UK and Belgium.

.

[lindsay~]

Thanks for your prompt response - much appreciated.

[Brussels Slumdog]

Contract terms

With this working from home arrangement I work out that I definitely won't go over 183 days not counting travel in and out days and more than likely won't go over the 90 days. (26 weeks x 3 days is only 78 days)

I'd very much like to just continue to pay tax in the UK and not fall into the Belgium system - do you think this is possible/legal?

Thoughts?

The Best solution would be to claim and invoice separately
Service provided from Belgium
Service provided from UK.
Travel Expenses

Completing a Belgian tax return is simple UNLESS you are claiming deductions
related to having to declare your world wide income then it becomes a really complicated.

[Magic]

I posted a this on another thread but re-posting here as it is relevant for Belgium:

Unable to get appointment yet with Tax Lawyer but had breif converstaion which went along the lines of... This country (outside EU) is part of the OECD however there are some unilateral agreements which means you can effectively operate for corparate and individual tax purposes without having to file anything in the other country. "bingo" except we do not advice to go bragging about this ... (no kidding) Will try and get chapter and verse etc early next week.

Would just say I think this means if it goes Tulip I could scurry back to my country and there is bugger all they could do as in my home country it is recognised as being the law.

[nodric]

I posted a this on another thread but re-posting here as it is relevant for Belgium:

For the benefit of others, the link to that other thread is here.

This country (outside EU) is part of the OECD however there are some unilateral agreements which means you can effectively operate for corporate and individual tax purposes without having to file anything in the other country.

This is the nirvana of contracting, but I wonder how sound that advice really is...

Pinch of salt for now, but very interested to learn how that is explained, and I bet everyone else on this board will eagerly wait such a revelation. This does sound a bit too much like Swiss ManCo waffle, but maybe it is doable. Question is, is it doable without being a non Dom millionaire?

Keep us posted

Would just say I think this means if it goes Tulip I could scurry back to my country and there is bugger all they could do as in my home country it is recognised as being the law.

Aye lad, but remember your home country wants to know all about your Worldwide income. If the scheme/solution/method you choose to follow is not recognised by Hector, then he will stick his hand out and demand his share, plus penalties, assuming he gets to know about what you were doing of course

[Magic]

This is the nirvana of contracting, but I wonder how sound that advice really is...

Aye lad, but remember your home country wants to know all about your Worldwide income. If the scheme/solution/method you choose to follow is not recognised by Hector, then he will stick his hand out and demand his share, plus penalties, assuming he gets to know about what you were doing of course

The reason I am waiting to talk to this person alone is that they were instrumental in scribing most of the tax law in this area at the time and writes the authoritive section for the tax bible that is published here each year.

Not going to say to much more as I am waiting for the "big flaw" in the nirvana.

[nodric]

The reason I am waiting to talk to this person alone is that they were instrumental in scribing most of the tax law in this area at the time and writes the authoritive section for the tax bible that is published here each year.
nirvana.

If they are that good, and the advice is sound, I'll pay half the bill!

I await with nervous anticipation

[Magic]

If they are that good, and the advice is sound, I'll pay half the bill!

I await with nervous anticipation

Just had another telephone conversation with the tax lawyer, it will take about a week before they can give me an accurate assessment of the situation (cost and time). They have another tax law office close to where my company is registered and need to check specific details about my company.

Final answers maybe sometime after that but I have no issue to burn some money in order to know the answers.

[Magic]

This Council Regulation is usually referred to as “Rome I Regulation”.

I came across this link which makes interesting reading.