Contracting in Belgium
Introduction
Belgium is an extremely popular location with international contractors. It is a very central location in Western Europe bordering The Netherlands, Germany, Luxemburg and France and only an hour from London by air. Due to its close proximity the country has three official languages, French, German and Flemish. English is also quite widely spoken and many Belgians speak it reasonably well. It is the sixth most densely populated country in Europe and therefore has a number of major thriving cities, the capital being Brussels is home to many flourishing international expatriate communities.
Belgium emerged in 1830 following a revolution whereby it separated from the Netherlands and is a sovereign state which is divided into three autonomous regions, Flemish region, Wallonia and the Brussels Capital region. Brussels, although the smallest is the most densely populated region as well as the richest.
Belgium is one of the six founding countries of the European Union as well as a founding member of Eurozone, NATO, OECD and WTO. Brussels is the location of numerous European Union institutions, including the European Parliament and European Commission as well as the headquarters for NATO. This combined with numerous embassies makes Brussels one of the largest diplomatic cities of the world. It is no surprise giving its European and globally influence along with its high standards of living and reputation for safety and peacefulness that such a high number of nationals from other countries navigate there for work.
Belgium has a strong economy, its ties and ease of travel with Europe making it one of the world’s largest trading nations. Its workforce is known for its productivity. The country itself has robust education, health and culture. With an open economy it has an influx of professionals and a lot to offer the international contracting community.
Chesterfield provides a wide array of Accounting Solutions for contractors in Belgium. If you work as a contractor, or on a Freelance basis, where your work places you on a clients site you will usually need to invoice through a compliant company structure. Our dedicated staff have a thorough understanding of contractors needs and are professionally trained to provide the most appropriate solutions tailored to your personal circumstances.
Registry/Registration
You may remain in Belgium for three months before you register your arrival, although if you intend to stay there more than three months then it is recommended that you do this within eight working days, this can be done at the Town Hall. Please note that failure to register could incur a 200EUR fine. Thereafter you must carry your registration certificate or temporary receipt at all times. It is important to note that as Belgium is divided into three autonomous regions that registration procedures may vary. If you wish to settle in the territory of the city of Brussells and are a citizen of the European Union then you need to register on the waiting list. You will need your passport or ID and then other required documents will be advised to you upon initial contact, although will almost certainly include three passport photos, proof of means of support, proof of accommodation and medical insurance. Please note that the correct address will have to be provided as there will be a police check to confirm that is where you are staying.
Once successfully registered you will be able to order an electronic identity card at a cost of 25 euros per card, which are valid for 5 years and can be collected at administration centres or liaison offices.
Income Tax
Please note that whilst resident in Belgium you will need to pay personal income tax on your total earnings worldwide. The tax year runs from 1 January to 31 December and an annual tax return must be filed. The tax free allowance currently stands at €8,860, although this does increase if you have children. The amount is based on earnings minus any compulsory social security payments. Professional expenses can also be deducted, but you will need to provide supporting documentation.
The 2019/2020 rates are:-
Up to €13,250 25%
€13,250–€23,390 40%
€23,390–€40,480 45%
€40,480+ 50%
If you are a non-resident, but live in Belgium for at least six months of the year then you are still classed as resident for income tax purposes. If you are non-resident and live in Belgium for less than six months of the year then you will need to pay income tax on income earned in Belgium only.
Social Security
Social security for foreigners depends on the conditions of your residency. When planning to work in Belgium you must take into account any agreements between Belgium and your usual country of residence as well as European legislation. Entitlements depend on your personal situation such as nationality and employment status. There are tools available online to help you figure out your entitlements and it would be advisable to make use of these before relocating to Belgium for work. Self-employed can also claim social security, but you will need to pay provisional contributions based on a fixed estimated income, after two years then the tax authorities will notify the social security funds of your professional income and final contributions can be calculated. As these is not jointly contributed between employers and employees it does mean fewer benefits, However, you can choose to make additional voluntary contributions to increase these benefits. It is important to note the self-employed contributions are paid quarterly and not monthly. Please note that you must register before commencing work and fines can be incurred for late registration or payment.
Employment Rules
Belgium has a High Council for self-employed, this is a public advisory body on a federal level. They formulate policy and advise on interests. Belgium also has several trade associations to represent the self-employed.
There is normally a probation period for working in Belgium and it is advised that you are aware of this before entering into a contract there. Average working hours is 38 hours per week, although longer hours are common as even though there is a general prohibition against overtime in the labour law there are exceptions. An employment contract is binding and in Belgium any changes to the essential elements without the consent of both parties can be deemed as a termination of the contract even if the employer has reserved the right to modify the working conditions. Any performance of temporary work needs to have a written employment contract.
Banks
Belgium has over 140 banks, both domestic and foreign and so there are a lot to choose from. Its banking system is considered one of the most sophisticated in the world making it one of the major banking and financial centres in mainland Europe. Belgium was one of the first countries to establish cashless payments and now over 90% of transactions across the country are done electronically. Due to its high level of electronic automation opening an account if you’re a foreigner is relatively easy as most of these can be done online even before you move to Belgium with a lot of the larger banks, you just need to inform them once your residence permit is issued. Various banks have accounts specifically geared towards expats which can include advantageous financial and insurance packages. Typical opening times are 9.00am to 4.00pm. The currency in Belgium is the Euro, although it should be noted that they have phased out 1 and 2 cent coins.
Corporate Structures
If you wish to contract in Belgium we offer Belgium self-employed services and Belgium employed payroll services. The difference is that the employed solution is on payroll and the taxes are deducted at source. The self-employed solution is not deducted at source and the amount gross is sent and the contractor is responsible for dealing with payment of taxes. Please see above for further information on income tax rates in Belgium, we do provide a Belgium accountant who can prepare and submit self-employed tax returns. If required we can also offer establishment of your own and can structure the invoicing to your particular needs.
Chesterfield and Contracting in Belgium
Chesterfield has years of experience with contractors and freelancers working in other countries and a variety of schemes and solutions in order to make life easier. You will be given a dedicated member of staff who is responsible for all your administration and contact, allowing them to be more in tune with all your needs and assist you in every way possible.
