You just received your Belgian (resident) tax return… and now what?

Eric Laurent

By Eric Laurent, Tax adviser at ERYV. 

It’s that time of the year again, where you have to collect your paperwork and start filling in THAT form, which will probably come with some apprehension as you have heard that this year 70 new codes have been added to the form while about 30 have been taken out.

Do not worry about the new items!

New code format: among the first four digits of a code, the first digit indicates to which partner the code applies: “1xxx-…” for the first partner and “2xxx-…” for the second partner. Since the 6th State reform transferring some tax competencies from the Federal to the Regional level, codes starting with 1 and 2 are reserved for the two partners for Federal tax matters and codes starting with 3 and 4 are reserved for the two partners for Regional tax matters

Happily, you don’t need to worry about calculations or the processing of the tax assessment, these are still managed by the Federal tax administration, no changes from that point of view.

One main new item is in relation to the tax reduction for own dwelling  (see tax reduction linked to mortgage interest payment  and capital redemption). This tax reduction now depends on the regional level and is done within a specific framework. In this context, «own dwelling» means the home you are living in personally and which you are the owner of. Filling information correctly either under the section related to your own dwelling (cadre / vak IX B.) and the one related to other dwellings (cadre / vak IX C.) could be complex and may require some reading (or the help of a tax professional). In the event of having made a mortgage loan after 01/01/2005 for the purchase of a flat or a house in which you are now living, there is no change compared with last year(but in cadre / vak IX B.) .

Foreign income and foreign bank accounts:

As a Belgian tax resident, you have to declare in Belgium your worldwide income (whatever the category of income: remuneration or pension, real estate, financial or other). The use of tax treaties will avoid double taxation in a lot of cases.

We are in a time where tax transparency and exchange of information between tax administrations is becoming the norm. The Belgian tax administration probably already asked you in previous years if you had a bank account abroad, if you had taken a foreign life insurance or if you are the founder of a “legal construction” or the effective beneficiary of income from this legal construction.  A rough definition of an eligible legal construction is a structure where you have transferred assets without any value in return or that is located in a low or no tax country (a list has been drafted by the Belgian tax administration). It can include, amongst others, foreign trusts or fiduciary structures. From 2015, it should be subject to the transparency tax (also called the “Cayman tax”).

The tax administration now requests the confirmation in your tax return that you have reported your foreign bank accounts to the Central Contact Point with the National Bank of Belgium. This can be done by downloading, signing, and sending a form back to the CCP, or by using the online tool of the Central Contact Point. It can also be done by a tax professional if he has got the mandate to do it. The definition of foreign bank accounts is quite large: it includes normal banks and saving accounts, but also investments accounts (e.g. in bonds or shares).

What’s your deadline for filing in the form?

If you file the paper return, the deadline is Tuesday, June 30th, 2015.

If you are using the electronic filing the deadline is Wednesday, July 15th, 2015. Remember to prepare your Belgian ID card and to have your pin code ready.

If you’re late, you can have it done through an accountant or a tax adviser, in which case the deadline is Thursday October 29th, 2015.

Good luck!

Are you an expatriate in Belgium? When finding your way in a new country, it is not always easy to get access to the right information about personal finance, tax and estate planning. The British Chamber’s Expat Financial Affairs exhibition offers plenty of short and informative presentations providing practical information about living in Belgium and how to handle your money. 

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