How can an Umbrella Company Help with Contracting in Belgium?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies that 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.
Can I Organise My Taxes and Work Permit Myself?
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.
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 as a Contractor in Belgium
| Tax Filing Deadline | 30 June for Residents & 30 September for Non-Residents |
| Can you file it online? | Yes |
How to File Taxes in Belgium as a Contractor
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 (EUR) | ||||||||||||
| 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. |
Tax Residency in Belgium
When do you become a tax resident in Belgium
You become a tax resident in Belgium when:
It is presumed that individuals enrolled in the Civil Register are tax residents, unless the contrary is proven. For married individuals, or ‘cohabitants’, it is irrevocably presumed to be Belgian tax residents if their spouse, partner or dependent children live in Belgium.
Does the 183 day rule apply in Belgium
No
Am I taxed on my global income in Belgium
Yes, if you are a resident. Non-residents are taxed on their Belgium-source income only.
Can you set up your own Limited Company in Belgium?
| How long does it take to set up | 4 days |
| How much does it cost | EUR 23,679.50 |
| Is it easy? | Starting a Business Rank: 16/190 |
Tax Calculator in Belgium
If you are a contractor and want a calculation on your tax and net retention in Belgium, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Belgium
Contractors in Belgium are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Belgian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Belgian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Belgian tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Belgium
We work with numerous umbrella companies in Belgium, many of whom are experts in tax and immigration laws. If you have any questions about tax in Belgium, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Belgian work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Belgium but without the overhead of directly dealing with the Belgian tax authorities. Get in touch with us today for some reliable advice on tax in Belgium!
A Contractor’s Guide to Work Permits in Belgium
Immigration is one of the primary concerns for any contractor hoping to start working in Belgium. Permanent employees will find it easy to get their Belgium work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Belgium work permit, known more commonly as the Work Permit B, is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Belgium is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
Work Permit Processing Time
4-12 weeks
Can Work Permit be Processed in Country?
The work permit is applied for in Belgium but the visa is applied for in the home country.
Work Permit Application Process
Work Permit Documentation
- Passport (copy) – Valid for at least the duration of the contract plus 3 months past the intended departure date, with bank pages for visa stamps. Please note a permit cannot be issued for longer than the validity of the applicant’s passport
- CV
- Job title and description
- Educational and professional certificates – must have a degree
- Residence address (in home country)
- Police clearance (not older than 6 months)
- 4 passport-sized photos (2 for the visa and 2 for the work permit)
- Medical certificate
How Does an Umbrella Company Work?
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 Can We 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).
