Belgium contracting: limited company/ management company

[captainham]

Think I've answered my own question, as the same website has some useful guides to working in certain countries.

For Belgium, it talks about "if their main home or centre of economic interests is in Belgium", which I presume you would fall foul of if working full-time in BE.

[BlasterBates]

Here is another useful link:

IT Jobs in Belgium | Technojobs

Due to the 183-day ruling, it is possible to work in Belgium as an employee of a UK company up to a maximum of 183 days (six months) and continue to pay taxes in your home country. It is important to note, however, that as soon as you exceed this deadline by even one day, you become liable for Belgian tax from the first day of your contract.

Furthermore, this ruling does not apply to a one-man limited company. Should you own your own company, and be a sole employee (or a relation to an additional employee), the seat of management can be seen as having relocated to Belgium and the company seen as moving to Belgium with you.

[Boo]

Why you can't use your UK Ltd in a foreign country and pay tax in the UK

Oh, very good Master B. You present the biased opinion of a "Contract Management Service" (Umbrella) in defence of your own biased opinion as a representative of an Umbrella. Convincing ! (Or something...)

Why will you not admit that you are a representative of an Umbrella btw ? Is it because you know you will lack all credibility if you do so ?

Boo

[Boo]

For Belgium, it talks about "if their main home or centre of economic interests is in Belgium", which I presume you would fall foul of if working full-time in BE.

No, they take into account a whole range of things like where your kids are schooled, where you own / rent property (hence my recommendation to stay in a B&B), where your car is licenced, whether you have a local bank account, etc etc etc. It is not primarily about where/whether you work full time.

In any case, Belgian law, like that of any other EU country, is subservient to the treaty obligation which imposed the 183 day rule on whether they can tax you as an employee of a company registered in another EU country.

Boo

[Boo]

Here is another useful link:

...snip...Another website funded and run by/for umbrellas

Boo

[captainham]

In any case, Belgian law, like that of any other EU country, is subservient to the treaty obligation which imposed the 183 day rule on whether they can tax you as an employee of a company registered in another EU country.

Even this very website seems to tally up with what BB is saying though, on the 183 day rule not applying to one man bands:

Contractors' Questions: Does the 183-day rule let me avoid tax? :: Contractor UK


My advice to the OP is to speak to a very good accountant who knows about double taxation and UK/BE tax rules!


Edit: and before anybody says anything, I know the author of that article is also from a company linked to here earlier, but as they are not just an umbrella, I don't think their opinion should just be automatically discounted. Only my view of course.

[captainham]

And another:

What do we say to a contractor who wants to use a UK limited company for contracting outside of the UK? | Crescenzi Consulting

Evidence appears to be against trying to use your UK LtdCo and sheltering under the 183 day rule, I would say?

[BlasterBates]

No, they take into account a whole range of things like where your kids are schooled, where you own / rent property (hence my recommendation to stay in a B&B), where your car is licenced, whether you have a local bank account, etc etc etc. It is not primarily about where/whether you work full time.

In any case, Belgian law, like that of any other EU country, is subservient to the treaty obligation which imposed the 183 day rule on whether they can tax you as an employee of a company registered in another EU country.

Boo

Perhaps you can post a copy of a letter from the Belgian tax authorities that you received confirming you were exempt from tax.

If you were considering doing it I would recommend actively seeking tax exemption rather than simply staying silent and being "indignant". At least that way you can be sure the tax authorities agree with your standpoint.

[Jessica@WhiteFieldTax]

So where this link talks about "As soon as the director of the company moves, the permanent establishment of the company moves with him", presumably this means where the Director moves full-time to the country in question. What about cases whereby a Director only works M-F in that country, then returns home at weekends?

Haven't read linky...

IME I've never come across a issue of effective control moving out of UK where the director is only temporarily outside of the UK. Although the director may be resident elsewhere, the UK links in terms of accountant / bank account / registration become "sticky" and the DTA tends to allow UK taxing rights. Which is not to say company residence can't move - it can - but its not very common without definite positive action.

[BlasterBates]

Haven't read linky...

IME I've never come across a issue of effective control moving out of UK where the director is only temporarily outside of the UK. Although the director may be resident elsewhere, the UK links in terms of accountant / bank account / registration become "sticky" and the DTA tends to allow UK taxing rights. Which is not to say company residence can't move - it can - but its not very common without definite positive action.

There are contractors who worked less than 6 months in Germany and were prosecuted for tax evasion. Which is why I post these warnings...and let us say you overstay your welcome then the tax authorities would backdate it to when you started there.

In other words you run a risk.

Why not at least register your business and let the tax authorities decide. Rather than waiting for an audit at some client co and a job lot of brown envelopes being sent out.

In the end if you are there temporarily the tax rates are low, you might be able to claim exemption and you pay no social security. In other words there is any case no financial incentive to run exclusively through the UK tax system other than the cost of an accountant in Belgium...and it might well be possible to do this through your UK Ltd anyway just making sure it's properly registered through LIMOSA or whatever they have.

...not to mention unpaid VAT