Belgium Taxes for US Expats: A Complete Guide

Living as an Expat in Belgium

With its breathtaking scenery, stunning architecture, and mouth-watering food, Belgium attracts a large number of US expats every year. However, Belgium boasts one of the highest tax rates in Europe. As a result, you’ll want to know the right way to manage your taxes for US expats.

It can be overwhelming to figure out how much you owe in expat taxes. But there are also some protections and tax breaks you can take advantage of when living abroad in this western European country.

Belgium at a Glance

US Expat Taxes in Belgium

US citizens and green card holders living in Belgium must file their US tax returns and report their worldwide income to the Internal Revenue Service (IRS) each year. In addition to filing US taxes, US expats in Belgium must also comply with Belgian tax laws, which can be complex and require careful planning to minimize tax liability. 

Who Has to File Taxes in Belgium?

In Belgium, both residents and non-residents who earn income from Belgian sources are required to file a tax return with the Belgian tax authorities. This includes income from employment, self-employment, investments, and rental income.  

While residents are taxed on all earned income, non-residents only need to pay taxes on Belgium-earned income. Similar to the US, Belgium taxes your income on a progressive scale. However, the rates are much higher, starting at 25% and climbing up to 50%.

Who Qualifies as a Tax Resident in Belgium?

You’re taxed differently in Belgium, depending on whether you’re a resident or non-resident. Here’s how to tell what your tax situation is.

Belgium Resident Qualifications

Those who have applied for residency in Belgium or were born and granted citizenship in the country are considered residents. You can become a resident by receiving a work visa or receiving the country’s entrepreneurship visa (if you’re creating a company in the country or investing in an already existing company).

In short, If you’re a resident of Belgium, you’re taxed on all of your income.

Belgium Non-resident Qualifications

If you’re a US expat who does not have a work visa, you’re likely not a Belgian resident. In this case, you’re considered a non-resident, and you would be taxed on any Belgium-earned income and not foreign income.

What Types of Taxation Does Belgium Have?

The income tax rate for foreigners in Belgium ranges from 25% to 50%, depending on how much income you earn throughout the year. The income tax rates in Belgium are progressive, meaning they increase with higher income levels. Both residents and non-residents are subject to these rates.

Just like in the US, the Belgium tax year runs from January 1 to December 31. US expats who are residents need to file their tax returns by June 30 (by mail) or July 15 (online). Non-residents have until November 10 (mail) or November 25 (online).

Income tax rates in Belgium

Remember, residents pay this tax rate on all earned income, while non-residents only owe income taxes to Belgium on income they made in the country.

Other Tax Situations in Belgium

Self-employment Tax

If you’re self-employed in Belgium, you’re responsible for paying into the Social Security fund on your own. In Belgium, this rate is just under 21% of your self-employment income.

Capital Gains Tax

Only some types of assets have capital gains tax in Belgium. While most individuals are not subject to capital gains tax, corporations are taxed at the regular 25% tax rate.

Stocks, however, are subject to a stock exchange tax, which varies from 0.12% to 1.32%.

Corporate Tax

Businesses in Belgium pay a flat 25% tax rate on all taxable corporate profits.

Value-added Tax (VAT)

In Belgium, you pay value-added when you buy goods or services. This tax is added when you checkout.

You’ll pay 21% VAT for most items and services in Belgium.

Some items with a 12% VAT rate include:

• Restaurants and catering (beverages not included)
• Inner tubes
• Phytopharmaceuticals
• Some combustion materials

Items with a 6% VAT rate include:

• Hotels and camping supplies and services
• Basic essentials (food and prescription drugs)
• Transportation
• Certain printed materials

Healthcare, banking, educational, insurance, property leasing, real estate, and social services are exempt from VAT.

There are several other specific items and categories that may qualify for lower VAT rates in Belgium. You can find a complete list here.

Wealth Tax

In Belgium, a 0.15% securities tax is charged on anyone with securities worth €1 million or more.

Inheritance Tax

Inheritance tax may be charged on certain assets, but the amount and rules vary by region. As of 2018, houses passed on to family members are no longer subject to inheritance tax.

Certain gifts are taxed at 3% when gifted to family members. Gifts sent to other individuals are taxed at 7%.

Property Tax

In Belgium, property tax rates range between 20% to 50%.

Social Security

All workers contribute to Social Security In Belgium. Employees contribute 13.07% of their gross monthly income to Social Security, while employers contribute around 27% of the employee’s salary (the exact amount varies depending on your income).

Does the US Have a Tax Treaty with Belgium?

Yes, the US has a tax treaty with Belgium. This treaty is designed to prevent double taxation.

Under the treaty, US citizens and green card holders living in Belgium may be eligible for certain tax benefits, such as the Foreign Tax Credit (FTC) and the Foreign Earned Income Exclusion (FEIE). These benefits can help reduce US tax liability for individuals who pay taxes in Belgium on their income earned in the country. 

The treaty also includes provisions for resolving disputes between the two countries and exchanging information to help enforce tax laws. It’s important for individuals who earn income in both the US and Belgium to understand the provisions of the tax treaty and how they may impact their tax obligations.  

Working with a tax professional who has experience with international tax laws can help ensure compliance and maximize available tax benefits. 

Does a Belgium-US Totalization Agreement Exist?

Yes, the US and Belgium do have a totalization agreement in place. This agreement helps prevent US expats from paying duplicate Social Security taxes — once in the US and once in Belgium.

The purpose of the agreement is to ensure that individuals who work in both countries are not subject to double social security taxation. Under the agreement, workers who are sent by their employer to work in the other country for five years or less are exempt from social security taxes in the host country. 

The agreement also allows for the aggregation of social security credits earned in both countries, which can help ensure that workers receive the benefits they are entitled to. 

It’s important for individuals who work in both the US and Belgium to understand the provisions of the totalization agreement and how they may impact their social security taxes and benefits. 

Belgium Tax Forms for US Expats Living Abroad 

As mentioned, US expats living in Belgium are required to file Belgian tax returns if they earn income from Belgian sources, such as employment, self-employment, investments, or rental income. The specific tax forms that need to be filed will depend on the type and amount of income earned. 

For example, employees in Belgium will receive an annual tax form from their employer called the “fiche fiscale” or “fiscal form,” which shows the amount of income earned and taxes withheld during the year. Self-employed individuals will need to file a different set of tax forms, including the “Declaration of Professional Income” or “Déclaration d’Impôt des Personnes Physiques.”  

If you’re a resident of Belgium, you’ll need to file a resident income tax form. You must submit this form via mail by June 30 or online by July 15. Non-residents in Belgium need to file a non-resident income tax form. This form must be submitted by mail by November 10 or online by November 25. 

You can file online at Belgium’s Federal Public Service Finance website. The Belgian government will mail paper returns.

US Tax Forms for Expats in Belgium

IRS Form 1040: Individual Income Tax Return

For US citizens and residents, IRS Form 1040 is a standard income tax return form. All US citizens and resident aliens must file their 1040 each year, even if they’re living in a foreign country like Belgium.

Typically, taxpayers must file Form 1040 by April 15th every year. However, the IRS automatically extends expats’ due date to June 15th. Taxpayers can also request a further extension to October 15th.

IRS Form 8938: Statement of Specified Foreign Financial Assets (FATCA)

You may also need to file a FACTA, depending on your specific financial situation. US expats with foreign financial assets that exceed a certain amount ($200,000 for single filers and $400,000 for those married, filing jointly) need to turn in this tax form.

File your FACTA with Form 8938, which you’ll then turn in with your 1040. The FACTA is due by April 15th.

FinCEN Form 114: Report of Foreign Bank and Financial Accounts (FBAR)

If you’re a US expat living in Belgium and you had more than $10,000 in a foreign financial account (or across all foreign accounts) last year, you’ll need to file FinCEN Form 114, known as the FBAR.

This form is best filed online through FinCEN’s BSA e-filing system. But you can file by mail if you request an e-filing exemption by contacting FinCEN’s resource center. In this case, you’ll receive your FBAR by mail. 

File your FBAR by April 15th every year, but you’ll receive an automatic extension to October 15th, without penalty, if you can’t make this deadline.

Tax Deductions for US Expats in Belgium 

While US expats in Belgium are already protected from double taxation, there are a few ways to reduce your US tax bill even more.

Foreign Earned Income Exclusion

You might be able to reduce your US taxable income by claiming the Foreign Earned Income Exclusion (FEIE). This US tax credit can help eligible expats deduct a portion of their foreign-earned income from their tax returns. 

For the 2023 tax year (Filing in 2024), you can exclude up to $120,000 from your taxable income. So, if you made less than this in foreign income, you could eliminate your tax bill altogether. 

You can claim the Foreign Earned Income Exclusion by filing IRS Form 2555.

Foreign Tax Credit

Americans living abroad in Belgium may also be eligible to lower their tax burn by claiming the Foreign Tax Credit (FTC). This tax credit allows you to deduct any foreign income taxes you paid, dollar for dollar, from your US tax bill.

For example, if you paid $18,000 in taxes to Belgium and you qualify for the FTC, you could deduct this amount from your US tax bill to lower or offset your tax liability.

You can claim the Foreign Tax Credit by filing IRS Form 1116.

Foreign Housing Exclusion

You may also be able to claim the Foreign Housing Exclusion for certain eligible housing-related expenses.

To claim this credit, you must also be claiming the Foreign Earned Income Exclusion. Both are filed with Form 2555.

Navigating Tax Compliance for US Expats in Belgium

We trust that our tax guide has given you a valuable overview of Belgium’s taxes for US expats. We understand that taxes can sometimes feel overwhelming, but managing your expat taxes on your own is achievable. However, should you need any assistance or support or have questions, Greenback is always available to provide expert guidance and help you navigate your tax obligations with confidence.

Contact us, and one of our customer champions will gladly help. If you need very specific advice on your specific tax situation, you can also click below to get a consultation with one of our expat tax experts.