Umbrella Company in Belgium
Independent contracting in Belgium isn’t always straightforward. You’ve got immigration issues, tax difficulties, and mountains of complex admin work. Even worse, missteps can cost you serious money, or even land you in legal trouble.
Before you consider taking a contract in Belgium, you should be aware of what you’re getting into – and how you can make it simpler.
Difficulties of Contracting in Belgium
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Belgium.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Belgium, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Belgium and your home country can seem like full-time work in itself.
How Umbrella Companies Work
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Belgium. Even better, most are experts in Belgian and expat tax law, meaning they’ll also help you optimise your earnings in Belgium.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Why Use an Umbrella Company in Belgium
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Belgium (which means avoiding fees, fines, or even worse penalties).
How We Can Help You
There’s a huge variety of Umbrella Companies with different specialities and advantages in Belgium. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Belgium and match contractors with the right company for them. If you’ve already secured a contract in Belgium, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).
A Contractor’s Guide to Taxes in Belgium
One of the most consistently challenging aspects of contracting in Belgium is complying with the country’s tax system. As well as paying tax in Belgium, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Belgium
If you’re working in Belgium under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Belgium for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Belgium, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Belgium through PAYE is left with the prospect doing everything themselves.
Do you know much about Belgian Tax Law? Does Belgium have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Belgium can range from 25 to 50 percent (not including municipal tax), and you need to be sure you are placed in the correct tax brackets.
| Tax Filing Deadline | 30 June for Residents & 30 September for Non-Residents |
| Can you file it online? | Yes |
How to File Taxes in Belgium
Step 1: You will receive a tax return form (déclaration/aangifte) from the Belgian tax authorities in May/June of the ‘tax year’ which allows you to declare income from the previous year or ‘income year’. This form specifies the due date for your tax filing (usually the end of June). Resident taxpayers must obtain the necessary forms from the Ministry of Finance if they have not received them by 1 June.
Step 2: All residents and non-residents must file an annual Belgian tax return. This can be done online via the Belgian government’s tax portal ‘Tax-on-Web’(link is external), or via post, to the address listed at the top of your tax return form.
Both residents and non-residents who are married or legally living together are required to file their tax return jointly, except for the year of marriage, year of declaration of legal cohabitation, or if they are living separately. They will still be taxed separately on all income.
Step 3: Before 30 June in the year following the ‘tax year’, an assessment notice will be sent to you. Any tax due must be paid to the tax authorities within 2 months of them sending the assessment notice.
Withholding Tax
Your employer will deduct a withholding tax from your salary. The difference between the final tax liability and the withholding, is payable or refundable within 2 months after receipt of the tax assessment.
Tax Figures in Belgium
| Currency | Euro | ||||||||||||
| Tax-free Threshold in Belgium | None | ||||||||||||
| Income Tax Rates |
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| Notes | The tax table above applies to both residents and non-residents.
If the spouse/legally cohabiting partner is unemployed, up to 30% of the working spouse’s/partner’s net employment income is attributable to the non-working spouse/partner. Residents are required to pay a municipal tax amounting to 0-9% of the federal tax due. Non-residents are must pay a federal flat surcharge of 7%. Foreign executives, specialists and researchers qualifying under the special tax regime are treated as non-residents for the purposes of Belgian tax law. As a result, they are taxed on Belgian-source income only.
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