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

[Drei]

Also you are taxed on day one if working in that country.

This thread contains old loop holes that won't be valid anymore

Fair answer but if this is the case does that mean the UK engineers sent to do work on client side abroad should pay tax in that country for the 2 months?

Sure I understand what the "legal" side says but how would any government taxman be able to actually pick you out of a line and say that you need to pay taxes without you telling them the specifics? You are just a resource doing work on behalf of another entity. I had coders come from India working for the sister company in the UK, they paid no taxes here, the company was paying for all expenses not the individual. They had allowances and the salaries were paid in India.

Same principle as if you worked on a Cruise Ship... do you pay taxes in every country the cruise ships ports? Based on what you say, you should as you do at least 1 day of work in each country the ship stops.

Does the UK or any country have a grasp on the number of people in their country? Of course not... reason why economical migration cannot be controlled anymore by EU countries.

I think it comes down to the contracts. If EU company has a contract for "professional services" with a UK company... that's it. The UK company does whatever it sees fit to get the work done. The UK company gets paid for those services, pays their employees wages, VAT and Corporation Tax. If Belgium wants to control foreigners coming working and not paying tax maybe the EU needs to split and each country to require visas again.


Plenty of foreign cars are not supposed to stay in UK more than 1 year, or people not able to use their EU Licenses to drive in UK longer than 1 year... however plenty still do 10 years later if they wish to do so.

Simple as that, you go to Belgium, there is no record of you being there... as far as anyone knows you are an employee of a UK company, getting paid in the UK, paying your taxes in the UK, living in the UK... even if you wanted to claim UK TAX back due to working abroad, you can only do that if you are working abroad for a full TAX year, as in star work before 5th April and stay in that country until next April. If you get a gig in August 2017 let's say you would have to stay in Belgium until April 2019 to be eligible for expat status.

[stek]

Fair answer but if this is the case does that mean the UK engineers sent to do work on client side abroad should pay tax in that country for the 2 months?

Sure I understand what the "legal" side says but how would any government taxman be able to actually pick you out of a line and say that you need to pay taxes without you telling them the specifics? You are just a resource doing work on behalf of another entity. I had coders come from India working for the sister company in the UK, they paid no taxes here, the company was paying for all expenses not the individual. They had allowances and the salaries were paid in India.

Same principle as if you worked on a Cruise Ship... do you pay taxes in every country the cruise ships ports? Based on what you say, you should as you do at least 1 day of work in each country the ship stops.

Does the UK or any country have a grasp on the number of people in their country? Of course not... reason why economical migration cannot be controlled anymore by EU countries.

I think it comes down to the contracts. If EU company has a contract for "professional services" with a UK company... that's it. The UK company does whatever it sees fit to get the work done. The UK company gets paid for those services, pays their employees wages, VAT and Corporation Tax. If Belgium wants to control foreigners coming working and not paying tax maybe the EU needs to split and each country to require visas again.


Plenty of foreign cars are not supposed to stay in UK more than 1 year, or people not able to use their EU Licenses to drive in UK longer than 1 year... however plenty still do 10 years later if they wish to do so.

Simple as that, you go to Belgium, there is no record of you being there... as far as anyone knows you are an employee of a UK company, getting paid in the UK, paying your taxes in the UK, living in the UK... even if you wanted to claim UK TAX back due to working abroad, you can only do that if you are working abroad for a full TAX year, as in star work before 5th April and stay in that country until next April. If you get a gig in August 2017 let's say you would have to stay in Belgium until April 2019 to be eligible for expat status.

Doesn't make any of that legal does it though? All depends how risk averse you are, pulling the wool over the eyes of the Estonian police by driving for longer than than legal is nothing and the consequences are small, but defrauding tax and illegal residency is criminal and if you get caught and it's getting more and more likely you will, its your warchest gone and possibly your liberty..

[Drei]

So if you were a permanent member of staff working for a UK consultancy company and they sent you to work on client site in Belgium for 6/8 months as they were implementing a new system, would you actually do anything besides go and do what you were told by your employer? I have done this in the past. When I worked for Fiat for example I was sent to Italy at IVECO for training and work. Was there a few months, did the same for US company, worked in their office in Ohio for over a month. Does that mean that I actually broke some TAX rules?

Why would it be your responsibility to pay taxes in said country when your salary is paid in your UK bank account and you pay taxes in UK?

I don't understand the logic of it. If my company was registered in Belgium sure, it would be my obligation but it isn't nor am I employing Belgian workforce. Same as others get Corp tax of %10 in Ireland, use Monaco or Gibraltar for tax purposes...

If I sold goods online from UK to Belgium, where will my taxes on those goods have to be paid? Belgium where the buyers are or UK where the company is?

[rileyz]

FYI 183 Day Rule Update

First of all, big thanks for to Boo and Nordic - great information here, still reading, only up to page 32 (phew).

Been doing research, they just ironed out the days thing, it now includes holidays, non working days (well in NL since it was a NL court). Not sure if this applies in Belgium.

news.pwc.be/double-tax-treaty-belgium-netherlands-application-183-days-rul/

Admin, you please upgrade me to PM, suspect I will need it soon, after reading the remaining 19 pages. Thanking you.

[tomex99]

First of all, let me express my sincere thanks to all active participants of this thread. I'm pretty sure it saved many lives of unsuspecting contractors who would otherwise accept Belgium based offers and starve to death soon after.

I've been recently offered a java contract for 500 EUR daily rate for a reputable Europen institution, but after reviewing this thread, doing a bit of my own research I came to the conclusion that it's either too risky or completely economically unviable. As to the principle, work is Belgium is taxable in Belgium and any attempt to prove different requires employing an army of accountants/tax advisors/attorneys and exposes to risk of a sudden BTA raid and 10k EUR a month after Belgian tax leaves in my pocket more or less the same amount that a half the rate worth of contract based in my home country (Poland) where purchasing power of the remaining part will be twice higher ! .

I don't have high hopes, but I feel it hasn't been explored enough is forming a Belgian limited company (for ex. Starter LLC with 1 EUR share capital) and paying 25-33% corporate income tax after deducing costs, can someone explain if this at all is worth investigating or is it more or less the same ripoff as self-employed personal income tax ?

[tomex99]

Here is the summary of what I've learnt so far for anyone who doesn't want to go through all the posts:

According to DTA:
a) 183 days rule applies to employees (dependent personal services) sent to temporarily work in another country for less then 183 days
b) businesses (independent personal services) are taxable in home country unless they have "establishment" (fixed base regularly available to them in another country, who knows what it is) available to them to provide services in another country in which case they are taxable there from day one.

According to OECD:
c) residency is determined based on home ownership and personal and economic relations (center of vital interests)

According to Belgians:
d) if you stay for more then 5 business days per month you have to register for LIMOSA as an employee or independent, but it's irrelevant for the most part
e) if you're a non-resident you have to declare your Belgium-sourced income
f) if you're a resident you need to declare your world-wide income
g) if you plan to stay for more then 3 months you need to register in municipality, since then you are presumed to be a resident taxpayer - unless you prove otherwise based on c) - you are then registered as an expat
h) if you are a resident Belgian tax authorities will have you on the radar
i) if you are a non-resident Belgian tax authorities won't have you on the radar
j) whether you are a resident or not you have to file a tax return and declare at least Belgium-sourced income, so it only makes a difference if someone wants to exercise a money-recycling scheme being employed via their home country-based limited company, etc., which effectively is tax evasion, unless b)

[Agaric]

ITECS Belgium and UK taxation

I am a UK resident who used ITECS when contracting in Belgium for 10 months in 2007.
The gist of this arrangement was ex-pat status, to receive a belgium salary and living allowance, a monthlyUK based consultancy fee, and a dividend payment, with a tax return being submitted on my behalf at the end of the year.
As this is for me a closed tax year and to my mind was compliant I have not paid so much attention to this in the past, but in light of the pending UK 2019 finance bill which opens up both open and closed years to retrospective scrutiny, and government crackdown on EBT schemes I thought it best to revisit this arrangement to be sure that this wasn't EBT.

Having waited for requested old bank statements to arrive I was horrified to see that on the statement that these dividend payments originated from ITECS-IOM, and while i haven't yet traced the source, this to me points to Isle of Man. If so then there's likely an EBT arrangement behind all this. I can only plead ignorance and naivety here, but I'm scared to think that that this will get caught up by the 2019 bill and in the eyes of hmrc be taxable income liable for backdated unpaid tax.

Has anybody else used this ITECS scheme? What are your thoughts and experiences?

[Ryan Langford]

Very sorry to add even more to this thread but after reading through it all, I'm just as confused.

I started my 1st contract (PAYE) last year in Germany and looking to move to another 12 month contract which I need to create a ltd co and move to Belgium.

I've been told by the agent that signing up for LIMOSA will cover me from falling into the SS / tax trap.

So by just signing the LIMOSA and nothing else, what tax / SS would I be liable to pay?

Many Thanks
Ryan

[tomex99]

Beware

Belgium is a socialist ripoff, take my words and stay away while you can.

[CppAnddotNET]

Commune registration if I work in Belgium under LIMOSA/180 day rule

Hi

I am wondering about the correct/ideal procedure if I work in Belgium under the 180 day rule with LIMOSA.

Especially, how should I go about registration at the commune?

Should I declare in LIMOSA the entire period at once?