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Friday, 11 February 2022

International Tax Update: Expense allowances granted under the new expat tax regime are exempted from social security contributions

A new special tax regime for incoming executives and researchers entered into force in Belgium on 1 January 2022.

The employer can pay the employee tax-free allowances for recurrent expenses related to the employment in Belgium (e.g. cost of housing, living, etc.) up to 30% of the gross salary, with an absolute maximum of EUR 90,000 per year. In addition, there are exceptional costs which can be reimbursed tax-free such as moving costs, furnishing costs and school fees.

The social security authorities (NSSO) confirmed earlier this week their point of view in which they follow the position of the tax authorities. This means that NSSO accepts that expense allowances granted under the new regime are exempted from employer and employee social security contributions. The Royal Decree of 28 November 1969 must still be adjusted, which means that the point of view is subject to final legislative approval.

If you would like to know more about the tax related aspects of this new regime, we recommend reading our previous article on the topic.

 

Katrien Bollen – Senior associate (katrien.bollen@tiberghien.com)

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