Contracting in Belgium - tax situation

[nodric]

In response to this thread, and many emails and PMs I get I wrote this short and hopefully useful guide in the forum. Link

[skubidoo]

Hi,

No-one seems to mention the Limosa law, whereby "all employees and self-employed persons (with a few exceptions) working on Belgian soil must be announced to the Belgian authorities before arrival" - the end client is liable.
You have to declare the expected amount of time you will be working in Belgium. This suggests you become liable to Belgian tax from day 1.

I am considering a contract in Brussels for the EU. I have worked through my UK Ltd in the UK, France and Spain with no problem. Belgium, on the other hand, seems like a diff. kettle of fish.

A management company seems the only option, I am reluctant to say.
Next step is to find a decent one and see what % of my rate I get to keep.

If anyone has a more tax efficient, legal method, please advise.

Thanks

Engfran,

I'm in the same boat now. How did you get on in the end? Did you go via UK Ltd or ManCo?

Cheers,

S

[ASB]

OTOH if IBM put you in, they are not just an EB so they can do it from a UK base.

They have the same problems, my employer is a large multinational. We have people on assignment from the UK all over the world. Equally we have people from various parts of the world on assignment in the UK. Some end up being resident where they are assigned, some don't. The major difference I think is that our HR and HR in the countries where people are assigned deal with it and are more aware of the issues.

[engfran]

Limosa

Hi,

No-one seems to mention the Limosa law, whereby "all employees and self-employed persons (with a few exceptions) working on Belgian soil must be announced to the Belgian authorities before arrival" - the end client is liable.
You have to declare the expected amount of time you will be working in Belgium. This suggests you become liable to Belgian tax from day 1.

I am considering a contract in Brussels for the EU. I have worked through my UK Ltd in the UK, France and Spain with no problem. Belgium, on the other hand, seems like a diff. kettle of fish.

A management company seems the only option, I am reluctant to say.
Next step is to find a decent one and see what % of my rate I get to keep.

If anyone has a more tax efficient, legal method, please advise.

Thanks

[expat]

Why does a UK company doing business with a Belgian/Dutch company have to pay odd taxes? I thought companies paid taxes due to where they were based, hence so many companies opening offices in Ireland due to low business tax rates there?

Is all this based on the company you are working with being in country X, or you being in country X? For instance if I am working with a client in Belgium but I work remotely 75% of the time from my house in the UK, how does it go then?

It is mainly to do with the kind of business that you do: if you're just selling widgets then you're fine. If what you're selling seems to be the labour of a person, you get into employment law, not to mention politics.

A bit like IR35...

Is it the "1 man company thing" which stops governments treating your company seriously? Does this mean if you actually work like a 'real' company and have some employees that you can work abroad without these nuisances?

Short answer: yes.

It's not that they don't treat Your Co seriously, but for a start (as has been said) if it looks like the Co's activity is in (say) NL then they will "see through" the apparent UK base of the Co, and class it as a NL Co.

Also, if what Your Co is doing is offering your labour to the client, then Your Co is classed as an Employment Bureau, and those are subject to additional regulations, for labour protection. And possibly revenue protection. For example, even if you were PAYE with your agency, they couldn't just put you in because they are an EB and an EB must be local (to make sure that it is subjetc to the law). OTOH if IBM put you in, they are not just an EB so they can do it from a UK base.

So your company has to be taken very seriously before it has none of these nuisaces.

You may escape quite lot of these probs if you work mostly in the UK, unfortunately I can't say. But as usual in this kind of stuff, even if the govt accept it, the agency or client may not, for fear of suffering later.

Note: I have read that this is indeed contrary to EU rules, but the countries do it ragrdless, because money is at stake.

[d000hg]

Is it the "1 man company thing" which stops governments treating your company seriously? Does this mean if you actually work like a 'real' company and have some employees that you can work abroad without these nuisances?

[Moscow Mule]

Why does a UK company doing business with a Belgian/Dutch company have to pay odd taxes? I thought companies paid taxes due to where they were based, hence so many companies opening offices in Ireland due to low business tax rates there?

Is all this based on the company you are working with being in country X, or you being in country X? For instance if I am working with a client in Belgium but I work remotely 75% of the time from my house in the UK, how does it go then?

It's all based on the country where the company is operating from. If you're a 1 man company working 5 days a week in Belgium the authorities there will say you're liable for company based taxes there (Hector does the same).

I'm not sure how it would work in your example (75% of the time in UK). I would hazard a guess that the seat of control of your company is still in the UK so you'd be ok but IANAA.

[d000hg]

Why does a UK company doing business with a Belgian/Dutch company have to pay odd taxes? I thought companies paid taxes due to where they were based, hence so many companies opening offices in Ireland due to low business tax rates there?

Is all this based on the company you are working with being in country X, or you being in country X? For instance if I am working with a client in Belgium but I work remotely 75% of the time from my house in the UK, how does it go then?

[SueEllen]

With Belgium the tax situation is slightly different to Holland.

You can use an umbrella that is based outside Belgium who is your employer, who supplies you to Belgium so you get a better tax rate.

It's worth talking to all the various schemes and umbrellas that can be found by searching the forum with the word "Belgium".

[Badger27]

Yeah - I turned the gig down - would rather pursue my own direct network of contacts in UK 1st - rate was only 400 EU per day which is lowest in 10 years for me !! Having investigated the issue further from previous posts I see there is the 183 day rule - this contract also offered working 40 hours over a 4 day week - what do BE tax authorities measure the 183 days on ? Days worked or nights stayed in country ?

[Jubber]

Is that a Belgium Umbrella or a UK one? Have you turned the gig down? Anything is better than nothing in my book, unless the rate was very low.

The problem you have in Europe is chain law. I know this is a fact for Holland and I think Belgium is the same. All is fine and dandy if you are there for less than 6months. You can use your UK umbrella/Ltd no problems. Once you go over six months I believe you have to pay Belgium taxes which are very high. 55% stoppages I believe for a single person.

The problem for the agency and client is chain law. If you stay longer than six months not only you are liable for Belgium taxes, the agency and client are liable for them if you disappear and don't pay. A lot of clients in Holland (and I presume Belgium) won't take that risk and will insist that your tax affairs are conducted in that country.

There are agencies and clients who are ignorant/not worried and will let you use UK companies for short contracts. See if anyone else has the gig on offer.

[Badger27]

Hi All,

I'm new to the board so bear with me if this topic has been dealt with.

I was recently offerred a contract in Belgium but got cold feet when agency insisted I use one of their appointed umbrella companies. I could not understand this necessity for this nor any of the explanations regarding BE tax laws.

Can anyone explain and also detail what % of fee I could expect to receive after all fees + taxes have been paid. All advice gratefully recieved.