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Expats benefitting from the new special tax regimes for inbound taxpayers and researchers in Belgium are granted an extended tax return filing deadline.
The new tax regime for inbound taxpayers and researchers came into effect at the beginning of 2022. Expatriates who opted-in or applied for this new regime last year are now approaching the first tax return filing deadline in Belgium. Due to the change in their tax residency status, the tax-on-web portal of the tax authorities often displays an incorrect tax status. Consequently, the Minister of Finance has announced an exception to the resident filing deadline.
Background
The ‘old’ Belgian special tax concessions, governed by a circular letter dated 8 August 1983, was a beneficial yet rather complex taxation regime for individuals who were hired abroad or transferred to Belgium by their employer. Upon fulfilling multiple conditions, these expatriates were considered as Belgian non-resident tax payers. As this former expatriate tax regime often created challenges and complexities from a international tax and residency point of view, the legislator created two new systems with focus on transparency and simplicity: the tax regime for inbound taxpayers and the regime for inbound researchers. Both regimes entered into force as from the 1st of January 2022. More information regarding the basic rules, conditions and benefits can be found in our previous alert (here).
Expats who benefitted from this old regime for a period of less than 5 years on January 1, 2022 had the possibility to opt in into this new regime. The Minister of Finance confirmed that 2148 foreign tax payers made use of this possibility. Another 1185 expats who arrived during 2022 applied for the new regimes as well.
Tax residency
Under the new regimes, the regular tax residency rules outlined in the Belgian Income Tax Code will apply. This means that the majority of expats have become tax residents of Belgium starting from January 2022. Only in case a qualifying individual can provide an annual certificate of tax residency from another country, they can maintain their non-resident status for tax purposes.
The huge number of expatriates (and their partners) that switched residency position during 2022 has resulted in IT issues on the tax on web platform of the authorities. Specifically, the tax residency type for inbound tax payers and researchers is not always accurately displayed. Some resident tax payers are still mistakenly classified as non-residents. In the light of this issue, the Minister of Finance has agreed to extend the resident tax return filing deadline from July 15 to October 18, 2023.
As a reminder, the EY specialist team remain at your disposal for assisting you with these tax related questions. Further updates regarding the new expatriate regimes will, as always, be posted on our website.