International mobility of persons: The "foreign executives" circular is (almost) dead, long live impatriate executives (and researchers)!

Background: from the "special" administrative tax regime to the integration of the regime in the Law

The former tax regime for foreign executives ("expat" tax status in the jargon) was based on a "simple" circular of August 8, 1983.  It will cease to apply to all new occupations starting on January 1, 2022, but beneficiaries of the old system will continue to be covered until December 31, 2023. 

As of now, Articles 32/1 and 32/2 of the 1992 Income Tax Code give the new special tax regime a legal basis.  It allows workers who benefit from it to be able to request its application in court. 

The new tax regime in a nutshell

This tax regime still requires prior authorization from the tax authorities. Here are the three main aspects of the system:

1) The beneficiaries of the regime: the tax law determines two types of impatriates:

- on the one hand, salaried or self-employed impatriate executives and

- on the other hand, salaried impatriate researchers;

They are either recruited from abroad or seconded to Belgium.

2) In addition to the remuneration, impatriate workers can obtain impatriation allowances (recurring and those based on supporting documents) which are tax exempt (considered as costs proper to the employer).

3) This new regime is limited in time: five years (with a possible extension).

Social security aspects

The Belgian social security authority (NSSO and NISSE for self-employed) aligns its position with that of the tax authorities. Impatriation allowances are exempt from social security contributions.

For impatriate employees who are seconded to another country as part of an intra-group mobility scheme, it is possible to remain liable for social security contributions in the sending country provided certain conditions are met.

Impatriates and the consequences in terms of work authorization

What is the impact of this new regime for foreign workers subject to a prior work permit?  The question involves impatriate researchers. 

As no minimum salary threshold is required for tax purposes, the remuneration offered must be at least equivalent to the salary thresholds required by the regional authorities to make use of the "highly qualified" worker status.  It should be noted that researchers hired under the "Scientific Visa" regime currently continue to benefit from the work permit exemption scheme.

Athena Law & Strategy advises and assists foreign executives and researchers in their installation and occupation in Belgium.

Do not hesitate to contact Mr. Marc Mostin (m.mostin@athenalaw.be) for any question related to the international mobility of employees or self-employed.