Additional tax assessments for employees residing in Belgium
The Belgian tax authorities send information requests to Belgian residents with a Dutch employer. In this letter, the Belgian tax authorities ask the employees to answer the question of whether they also work outside the Netherlands for their employer. These information requests regularly lead to an additional Belgian tax assessment for you as an employer and/or the employee in private.
Many countries have national laws under which tax may be levied on the worldwide income out of employment from their residents. Many countries also have national laws under which they may levy taxes on the income received out of employment in that country. This also applies to the Netherlands and Belgium.
Physical presence is a guiding principle of taxation
The Netherlands and Belgium have agreed that income out of employment will be taxed in the country of residence of the employee. Only if and insofar as the employee actually works in the other country (i.e. is physically present in the context of the employment), the other country may levy tax. Briefly summarized: Belgium may levy tax to the extent that the employee works in Belgium and the Netherlands may levy tax to the extent that the employee works in the Netherlands. Where you are based as an employer is not relevant in this context.
Exception: 183-day rule
There is an exception to the general rule. This is the secondment scheme, also known as the 183-day rule. Provided that all conditions are met, only the country of residence may levy tax on the wages out of the employee's employment. A Dutch employee with an exclusively Dutch employer therefore can go on a business trip to Belgium without immediately having to pay tax on this.
However, for Belgian employees with Dutch employers matters such as working from home and business trips outside the Netherlands may have immediate tax consequences. Belgium, as the country of residence, in principle has the right to levy tax on this part of the wages. Sufficient reason, therefore, for the Belgian tax authorities to inquire with these employees.
ABAB Global Mobility Services has in-house expertise for legal and tax support for employers and expats. Please contact Clea Cremers, global mobility specialist - tax, by phone +31 (0)77-3217715 or send Clea an e-mail.