Special tax regime for incoming taxpayers and researchers. New tax circular 2022/C/47.
On 6 May 2022, the tax authorities published a new circular on the new special tax regime for incoming taxpayers and researchers. This circular contains few novelties (compared with what we mentioned in our newsflash of 31 December 2021 on this subject) and mainly summarises the conditions of application of the new tax system.
New special tax regime for incoming taxpayers and researchers
As a reminder, the Programme Act of 27 December 2021 (published in the Belgian State Gazette on 31/12/2021) introduced a new legal framework for expatriates in Belgium, namely, the special tax regime for incoming taxpayers (STRIT) and for incoming researchers (STRIR).
The advantage of this new scheme lies in the possibility to grant amounts to the incoming taxpayers and researchers in the form of reimbursements of expenses specific to the employer that are exempt from Belgian taxes and social security contributions.
Thus, an indemnity of maximum 30% – with an absolute maximum of EUR 90,000 per year – of the annual gross salary can be granted as a reimbursement of costs specific to the employer. This indemnity covers the recurrent expenses resulting from the Belgian employment. Moreover, within certain limits, the employer can reimburse the relocation costs, furnishing expenses of a house in Belgium and the school fees of the children of the expatriate or their spouse.
Nevertheless, the benefit of this system is subject to a number of conditions. To benefit from the STRIT/STRIR, the persons concerned must not have been subject to the Belgian personal income tax/non-residents tax (on professional income) during the 60 months prior to their employment in Belgium, nor must they have lived within a perimeter of 150 km from the Belgian border.
For the STRIT, the person in question must also receive a gross annual income of at least EUR 75,000 (before deduction of social security contributions) for the services rendered in Belgium.
For the STRIR, on the other hand, there is no salary requirement, but the persons concerned must hold a qualifying diploma or have at least ten years of relevant professional experience.
Clarifications in Circular 2022/C/47 of 6 May 2022
Although the tax circular of 6 May 2022 is mainly intended to summarise the conditions of application of the new tax regime, it also provides some additional clarifications. The following are the most important clarifications and points of attention:
1. Minimum remuneration threshold of EUR 75,000 for access to the STRIT
The circular points out that, at the time of submitting the application for the STRIT, the calculation of this threshold relates to the certain and fixed gross remuneration, i.e., excluding the bonuses of which it is uncertain if they will be granted. However, it is specified that subsequently, for the annual verification of compliance with this condition, the remuneration threshold will be assessed in light of the gross remuneration actually received, including bonuses received for which the grant was initially uncertain (e.g., bonuses granted after reaching certain objectives).
On the other hand, in case of interruption of the employment whereby the salary is not paid – for example long-term illness or pregnancy – the threshold of EUR 75,000 may be recalculated on a pro rata basis.
2. The diploma or the professional experience of the incoming researcher (STRIR)
To be eligible for the STRIR, the persons concerned must have a master’s or doctor’s degree in one or more specific fields of specialisation. The exact list of the approved diplomas is attached to the circular.
The persons concerned can also qualify if they demonstrate at least 10 years of relevant professional experience. In addition to a CV, this experience must be proven by references from former employers, publications, training courses given, etc.
3. 30% allowance is considered as a cost specific to the employer
In this respect, the circular specifies that the payment of this allowance must be contractually agreed and must be paid on top of the agreed gross salary. Therefore, it is not possible to stipulate that the 30% allowance is included in the agreed gross salary. It should be recalled that the 30% allowance is a maximum. In other words, it is possible to provide for an amount lower than 30% of the gross salary, regardless of whether it is a lower percentage or an absolute amount that does not exceed the 30% maximum. The tax administration also specifies that although the allowance may differ from one employee to another, this difference may not be related to individual performance. It should be noted that this clarification has no (explicit) legal basis.
Individuals who already benefit from the “old” special expat tax regime and who have opted for the new regime by 31 July 2022 at the latest will have to have their existing employment contracts adapted. As an aside, it should be recalled that fulfilment of the conditions (min. 150 km from the Belgian border, not having been subject to the resident or non-resident income tax (for professional income) and the remuneration threshold for the STRIT) must be assessed at the beginning of the Belgian employment (and not at the time of filing application to opt in). Although the tax administration implicitly accepts that a decrease of the initially agreed gross salary is allowed in order to be able to add the 30% allowance on top of the salary, it does point out that such a change can have consequences on, among other things, the supplementary pension (the so-called 80% rule), the holiday pay and the social benefits.
4. Other reimbursements of expenses specific to the employer
Finally, the system of the expenses specific to the employer introduced by the programme law of 27 December 2021 for the benefit of incoming taxpayers and researchers does not interfere with the classic system of the reimbursement of cost specific to the employer. Thus, it is possible to cumulate the reimbursement of expenses covered by STRIT/STRIR with, for example, the reimbursement of representation expenses or the costs related to remote working.
Action point
The introduction of this new special tax system for incoming taxpayers and researchers offers new opportunities for attracting foreign talent through attractive remuneration. This is possible thanks to the advantageous system of reimbursement of costs specific to the employer resulting from the move to Belgium. At the same time, when drafting the employment contract, you should pay special attention to the wording of the clauses on remuneration and reimbursement of expenses specific to the employer.