In Belgium, nonresident taxpayers are normally not entitled to personal exemptions, except for the following categories of taxpayers:
- Nonresident taxpayers who have an abode in Belgium for the whole taxable period (i.e. nonresident taxpayers who are living in Belgium with their family);
- Nonresident taxpayers who receive at least 75 percent of their earned income from Belgian source;
- Nonresident taxpayers who can invoke an extended non-discrimination clause included in a tax treaty signed by Belgium. (tax treaties with the Netherlands, France, and Luxembourg).
Expatriates benefitting from the expatriate tax concessions are considered as deemed nonresident taxpayers and are entitled to personal exemptions if they belong to one of the above categories. Expatriates living in Belgium with their families for the whole calendar year are considered as nonresident taxpayers with an abode in Belgium.
If the draft legislation is adopted, the category of nonresident taxpayers with an abode in Belgium will be abolished as of 1 January 2014.
Expatriates benefitting from the expatriate tax concessions are taxable on Belgian source income only and income with respect to working days outside of Belgium is excluded from the taxable basis.
As noted above, adoption of the proposed legislation will imply that expatriates benefiting from the expatriates tax concessions having a foreign travel exclusion in excess of 25 percent will no longer be entitled to personal exemptions.
The annual additional income tax due if the proposed legislation is adopted for an individual with the following family situation will be: (2013 income tax rates, indexed 2014 rates are not available yet):
Married, spouse has no earned income
Married, spouse has no earned income, 2 dependent children