Reply to: Contracting in Belgium for 1 year

[Skag]

The Belgian taxman sounds more efficient than the UK one....

Based on experience?

[SueEllen]

This complicates matters even more. If I'm self employed in Belgium, I will have to pay taxes and SS in Belgium. Unless you can find somewhere on the web that states the opposite? (Or a source).

Interestingly, I have been told by the hiring company, that most of the contractors are going to use their UK Ltd for 6 months, and then sign up for an umbrella company, and thus staying effectively "invisible" as far as Belgian citizenship is concerned. This sounds ideal, especially as I'm dipping my toe in the water for the first month or two.

The Belgian taxman sounds more efficient than the UK one....

[Skag]

Forget about using your UK company, unless you can show that you cannot manage or make decisions for it yourself. Contractors in other EU countries, except for the UK, are usually self-employed, not limited company owners. Tax laws and regulations about "permanent establishment", employment laws, social security etc are based on that assumption. As self-employed you can just send yourself to work in another country for up to six months (usually, except for in the UK and Ireland) without paying any taxes there, as long as you commute home regularly.

As you will spend more time there than six months in a 12 month period (not tax year), you would have to operate Belgian accounting and taxes for the self-employed so you might consider working through a payroll bureau (e.g. "umbrella") just to keep things simple, but you should probably discuss the options with an accountant or payroll bureau there. It is likely that the payroll bureau could still take care of administration for you even as self-employed.

Obviously, your self-employed status is quite useless in the UK as it stands (if you're working through agencies), but outside of the UK it works wonders, where companies are for people wanting to grow their business and hire employees to do (most of) the work.

This complicates matters even more. If I'm self employed in Belgium, I will have to pay taxes and SS in Belgium. Unless you can find somewhere on the web that states the opposite? (Or a source).

Interestingly, I have been told by the hiring company, that most of the contractors are going to use their UK Ltd for 6 months, and then sign up for an umbrella company, and thus staying effectively "invisible" as far as Belgian citizenship is concerned. This sounds ideal, especially as I'm dipping my toe in the water for the first month or two.

[Sue B]

Yes we would Sue.

Thanks, will put something together as I have time, and send it to you.

[cojak]

Thanks Eek.

I would be happy to put together an FAQ, it doesn't have to be country specific as all EU countries are the same from a tax law point of view. Would the Mods be ok with this?

Yes we would Sue.

[m0n1k3r]

This is my first contracting gig. I have been offered a contract to Brussels for 1 year. I have registered an Ltd last summer so that is in place. The income will be past the VAT threshold.
I called an accountant and he said that he will need about 10-15 hours on 275 per hour to look into structuring the most tax efficient way to do this, as taxation in Belgium can reach 50% (and I don't want that). Then again, I live with my spouse in London and don't know if it's really worth it going to Brussels, if I'm going to be paying, say 45% at the end, plus pay some 3k or more to an accountant to structure only my company, and then pay an accountant for book keeping and the rest. The accountant said that the structure will have to be in place before I start (which may have sounded a but pushy).
I have tried to shop around but no one is really confident on how to do this best, and this guy who has good reviews and was suggested, said he has done it before for his clients, and knows how it can be done.

Thoughts on this? Is the accountant charging a bit too much? Or is this standard practice?

Forget about using your UK company, unless you can show that you cannot manage or make decisions for it yourself. Contractors in other EU countries, except for the UK, are usually self-employed, not limited company owners. Tax laws and regulations about "permanent establishment", employment laws, social security etc are based on that assumption. As self-employed you can just send yourself to work in another country for up to six months (usually, except for in the UK and Ireland) without paying any taxes there, as long as you commute home regularly.

As you will spend more time there than six months in a 12 month period (not tax year), you would have to operate Belgian accounting and taxes for the self-employed so you might consider working through a payroll bureau (e.g. "umbrella") just to keep things simple, but you should probably discuss the options with an accountant or payroll bureau there. It is likely that the payroll bureau could still take care of administration for you even as self-employed.

Obviously, your self-employed status is quite useless in the UK as it stands (if you're working through agencies), but outside of the UK it works wonders, where companies are for people wanting to grow their business and hire employees to do (most of) the work.

[cojak]

Linky ?

Thanks,

Boo

Google ‘taxfoundation.org’ with the title of the chart.

If I can find it you can too.

[Boo]

This graph shows why you might not want to work/contract in Belgium

Linky ?

Thanks,

Boo

[MBA]

This graph shows why you might not want to work/contract in Belgium

[Sue B]

Ive been meaning to ask for a while.
If I do 3 days in Ireland, once a month and the rest in uk or at home I assume I’m normal uk Ltd rules.

Is there a definitive cutoff where you become liable for tax in another country? I assume again there is and that you need to check on a country by country basis.

And for the OP could that mean 1 week a month in Belgium and all is as he wishes?

There are circumstances when the 183 day rule could be deemed to apply, but really for PSC's its only for business trips. Understanding business trips vs assignments is important.

The length of business trips are not enshrined in generic tax law but generally are considered to be a few days to a maximum of 30. They must be ad hoc, and ancillary to your UK project. They cannot be contractual, and not to deliver services to an Irish client but rather in furtherance of the UK contract.

As soon as there is a contractual requirement to spend time in Ireland, or, even without a contract, the trips are expected and part and parcel of what you have to do, this is an assignment. If at any point you are working on behalf on an Irish client and not a UK client, then this is also an assignment.

Assignments, even just for a few days, are never business trips.


HTH.

[Sue B]

Working abroad is simple.

You assume you are there all week and pay tax there on the income you earn there. My advice would be to speak to sue @ipaye (she does post here at times).

We really need an faq regarding working aboard - it’s not difficult once you understand the rule above.

Thanks Eek.

I would be happy to put together an FAQ, it doesn't have to be country specific as all EU countries are the same from a tax law point of view. Would the Mods be ok with this?

[Skag]

Have done four EU countries without doubt the one I wouldn’t touch with the proverbial is Belgium.

And France

I've read your previous comments in other threads about staying away from Brussels and instant no on such job offers
No reason to doubt you, plus I read elsewhere that contracting in Belgium is cumbersome. And I'm still to read anywhere "oh go to Belgium, it's heavenly!". So I am more inclined to believe you.

I think at the end, it's extremely difficult to find someone in the UK who understand Belgian taxation law..

[eek]

Have done four EU countries without doubt the one I wouldn’t touch with the proverbial is Belgium.

And France

Everything I’ve read says the social will destroy any profit.

As I sit in Copenhagen I have to admit this client has been good for providing possible escape options from the uk if I need one. Austria would probably be my favorite. The mountain pass from the end client who would give me a job tomorrow to Italy is however blooming scary

[stek]

Have done four EU countries without doubt the one I wouldn’t touch with the proverbial is Belgium.

And France

[eek]

I have been looking into it, and what's worse that scarce knowledge on the web, there don't seem to be accountants who know what's what.
I'll try to ask the recruitment agency what do the other people do in similar occasions..

The simple fact is that your typical accountant in London isn't qualified to give you tax advice about working in Belgium. it really requires an accountant in Belgium or a firm that specialises in cross frontier employment (iPaye) to give you the advice you need.

Oh and don't expect it to be cheap but I still don't trust your accountant....