Reply to: 12 month Contract Belguim

[norrahe]

Your Employer being you completes the LIMOSA form. The BTA Belgian tax authority receives a copy and will expect a tax return from you the employee . You will need to declare a Belgian Salary as in the UK even if is only 5% of your fees.
You will need to prove that your LTD company does't have a permanent place of business in Belgium.
Only a fiscal tax expert can give you the correct advice based on your situation.

WHS, seriously stop wasting your time asking numpties on a website when you could speak to an accountant who can advise you properly!

[Brussels Slumdog]

Not that simple

So if I understand all of the above correctly, with regard to the original question about contracting in Belgium and income tax, it is advisable to:

1. work through a limited liability company not located in Belgium (your own or your partner's)
2. have yourself seconded to Belgium and paid a salary through the limited in country of residence
3. rent a studio or flat and register with the commune
4. register for Limosa
5. spend less than 183 days on the ground in Belgium
6. get A1 from social security organization in country of residence (formerly E101)

Doing the above one would legally avoid paying social/income taxes in Belgium and be elegible to pay tax in country of residence?

Your Employer being you completes the LIMOSA form. The BTA Belgian tax authority receives a copy and will expect a tax return from you the employee . You will need to declare a Belgian Salary as in the UK even if is only 5% of your fees.
You will need to prove that your LTD company does't have a permanent place of business in Belgium.
Only a fiscal tax expert can give you the correct advice based on your situation.

[oneeyedjack]

So if I understand all of the above correctly, with regard to the original question about contracting in Belgium and income tax, it is advisable to:

1. work through a limited liability company not located in Belgium (your own or your partner's)
2. have yourself seconded to Belgium and paid a salary through the limited in country of residence
3. rent a studio or flat and register with the commune
4. register for Limosa
5. spend less than 183 days on the ground in Belgium
6. get A1 from social security organization in country of residence (formerly E101)

Doing the above one would legally avoid paying social/income taxes in Belgium and be elegible to pay tax in country of residence?

[norrahe]

Am currently working in UK, under a Dutch BV. I sought the advice if my accountant (who also is an expert in international tax law) who advised that I can work up to 183 days in another country and only pay tax where I am resident. As long as my company or I do not set up a permanent base in the other country.

The 183 day rule varies in application if you are based in the UK it applies over a 12 month period, in Belgium or France its per calendar year.

There are reciprocal tax laws which ensure if you are resident elsewhere in the EU that you do not get double taxed. I know that the UK and NL have such an agreement.

What I would advise to to speak to a good accountant who specialises in international tax law who can advise you properly.

Good luck.

[SueEllen]

I imagine there are very few contractors in Sweden so probably they don't look for it in the same way they do in Belgium the Netherlands or Germany. But there is a risk unless you clear yourself with the authorities.

The populations in Nordic countries are much smaller so it's very easy to keep track of people.

You are also expected to obey the rules to the letter. So if they aren't interested in you they really aren't interested in you.

[BlasterBates]

I've already in a previous post given you 2 countries where you can use your UK limited company or be taxed in the UK via umbrella up to 183 days legally.

The tax authorities aren't interested in you in these countries until you spend or declare you will spend over 183 days in these countries. You don't need to get a formal exemption because there isn't one.

However you are legally obliged to register with the population department. If you don't and get caught they will fine you.

I know Accenture wanted to send staff over to these countries for longer than the 183 period and they realised that the staff would be personally screwed taxwise due to the countries' tax laws on BIK.

According to the Swedish government

Citizens of the European Union (EU) or European Economic Area (EEA) and Switzerland are entitled to residence in Sweden but must register with the Swedish Migration Board within three months of arriving in the country. Once your right of residence has been established, you can apply for a personnummer.

10 tips for starting a business in Sweden - SWEDEN.SE

I think you need to register yourself anywhere you do a contract. Whether you can exempt yourself is another matter, and they will want to know what your doing, so in effect you'll be applying for exemption.

If you read carefully as an employee you can work up to 6 months without paying tax, they do state that. But careful you run your own business it's not always as clear.

Now the way it was in Germany was the same everyone assumed if you stayed less than 6 months you were clear, as employees can be seconded, now when there was a few contractors the Finanzamt didn't bat an eyelid, but then they hired armies of contractors from the UK quite a lot of whom overstayed their welcome, so they busted them but they also busted the ones that were there less than 6 months.

I imagine there are very few contractors in Sweden so probably they don't look for it in the same way they do in Belgium the Netherlands or Germany. But there is a risk unless you clear yourself with the authorities.

[SueEllen]

Lets put it this way if you arrange to tax yourself in the country where you're working and pay at the most topup tax, you will never have a problem.

If you work through your Ltd, not declaring anything at all you run the risk of tax evasion.

I've already in a previous post given you 2 countries where you can use your UK limited company or be taxed in the UK via umbrella up to 183 days legally.

The tax authorities aren't interested in you in these countries until you spend or declare you will spend over 183 days in these countries. You don't need to get a formal exemption because there isn't one.

However you are legally obliged to register with the population department. If you don't and get caught they will fine you.

I know Accenture wanted to send staff over to these countries for longer than the 183 period and they realised that the staff would be personally screwed taxwise due to the countries' tax laws on BIK.

[BlasterBates]

That isn't true - it depends on the country.

Lets put it this way if you arrange to tax yourself in the country where you're working and pay at the most top-up tax in the country where you are resident, you will never have a problem.

If you work through your Ltd, not declaring anything at all you run the risk of tax evasion.

I've worked a 3 month contract in Lux, I taxed it there, when I signed up for a 6 month contract in Switzerland, I taxed it there. This is never a problem. However there maybe some grey areas in some countries where you can claim "you're working for a foreign company" but the rules are always woolly.

Lets put it this way, better to be told by a foreign tax authority that your earnings aren't taxable than have some VAT officials storming into your hotel room or temporary apartment and arrest you.

I know in Switzerland, Luxembourg, Germany, the UK and the Netherlands that you need to be taxed from day 1, of course I know plenty of contractors who do it illegally and get away with it.

Of course I can imagine that it is possible that laws of some countries may permit it, but I'd be very sceptical that it is legal. For example it was commonly accepted that in some of these countries in the past you didn't need to tax yourself, but suddenly the tax authorities clamped down and a lot of contractors were in hot water. I also know for example some years ago Logica was sending employees over to Germany and they got raided. It's sad that these disagreements on how one can tax yourself are resolved by uniformed officials escorting contractors into an interview room.

If you're not registering with the tax authorities at all, it is most likely illegal. Anything that is legal would be monitored by the tax authorities of the country. Normally you claim exemption. If someone is operating in a foreign country with written approval/ exemption that's fine.

I would advise anyone working in a foreign country to register and pay tax or formally exempt themselves, via a local accountant, but when your tax management co. rep. tells you to shush and not say anything to the tax man I would treat it with a great deal of scepticism.

[The Spartan]

Being able to work in a country for 6 months immune from the tax authorities is an expensive myth.

Hence my contract here is 13 months and encompasses a full UK tax year

[SueEllen]

Being able to work in a country for 6 months immune from the tax authorities is an expensive myth.

That isn't true - it depends on the country.

[stevejohnson]

Its actually agents wanting the LIMOSA , the client doesnt care. Do we interfere with the agent's company registrations ? most are in Lux or offshore. No we don't. But they are prepared to work with the contractors who bend over. Try to avoid agents all together.

It is all gonna end soon anyway. We are fast marching towards total technological control.

[stevejohnson]

And all that when no employees at the EU institutions pay taxes.

[BlasterBates]

Your understanding is wrong in every detail, but as an outout-only man you will persist in spouting this carp in the forum.

Any EU firm may send any employee to work in another EU country for 183 days without that person falling under the destination tax regime. Fact.

Boo

Try telling that to the contractors who worked in Germany for less than 6 months, and facing tax evasion charges. Most contractors don't run large companies who second employees, one man companies are viewed in virtually all countries as having their centre of activities wherever their contract is.

Being able to work in a country for 6 months immune from the tax authorities is an expensive myth.

[SueEllen]

Not in EU law there's not.

In the Netherlands and Germany this won't wash. They won't let larger companies use workers from businesses particularly small businesses in that way.

And I know in other EU countries MyLtd has to have more than one company director to clearly demonstrate the place of operation of the company is not in that country but the UK.

For example in Sweden you can do a 183 days before you, personally as a worker, fall under Swedish tax law. However that 183 days clock starts from the day you first step into the country, and even if you have holidays and come back to the UK for 2 weeks, the clock is still ticking on that worker's personal tax liability.

Finland is the same. Though they aren't very clear on whether days out of the country count.

In the Nordic region the rules are clear and the tax offices will openly answer your questions in English without demanding tax of you.

BTW falling under a country's personal tax law doesn't mean you fall under the social security rules if you remember to get an exemption.

[Boo]

There is most likely a difference between Delotte or KPMG Ireland sending you to work in Belgium and MYLTD Ireland sending you its only employee to work in Belgium

Not in EU law there's not.

Boo