why are taxes so high in belgium

If you’re employed in Belgium, your employer might deduct some money from your wages every month to cover the expected tax bill at the end of the year. (*although, this doesn't apply for things like physiotherapy, massages, and dentist appointments, as they would be covered under your/your spouse's work health insurance). Otherwise, trying to figure out the very complex underlayings of each system may prove misleading and throw you off your path. I have been presented with an opportunity by my company (based in the US) to move to their Brussels office. A Belgian employee’s “real tax rate” (including VAT) is now 56.7%, compared to an EU average of 44.8%. , but I am now genuinely curious about why Belgium supposedly has the highest (or second highest?) As a child from a single mother who had to get by with government disability and some child support my father grudgingly paid: upward mobility definitely is a possibility. We escaped! However, I recently had an interesting conversation with my classmate's friend and found that his average income tax rate is about 42% based on his salary of about 60,000 Euros per year (I think he makes a bit more than that). All these things cost money. But in your position I wouldn't ask why, simply because any answer will add more doubt ( variables ) than certainty to your question. Foreign executives, specialists and researchers that qualify under this regime are treated as non-residents and as such are taxed only on Belgian-sourced income. If you're considering working for a couple of years, and to then go into government benefits, Belgium is amongst the best countries for you. This reform was motivated by the high levels of taxation that generated adverse labour market effects. It's not all bad though, our healthcare is one of the best in the world, education is heavily funded (most middle-class people can support their children going to college without going into huge amounts of debt), public transport is kind of cheap but VERY unreliable. Residents of Belgium are taxable on their worldwide income, while non-residents are only taxable on Belgian-source income. Cars are also prohibitively expensive. Tax revenue stood at 48% GDP in 2012. But what i don't know is what does that money go towards after? Vastly underrated. If not, how do people normally … Foreigners living in Belgium are considered a resident for tax purposes if their main family home or the center of their economic activity or interests is in Belgium. Press question mark to learn the rest of the keyboard shortcuts, https://www.reddit.com/r/belgium/comments/641hep/omstreden_biomassacentrale_langerlo_aan_zijden/. daughter and a baby boy on the way. As to why Belgian taxes are so high ( while getting no extras ) the answer is simple: highly inefficient and outdated system. The tax system in Belgium Tax rates in Belgium are some of the highest in Europe. I have cancer (don't worry it's going very well :) , was in and out of the hospital the last couple of months for all sorts of things from surgeries, scans, chemo, emergency fevers, ... Lots of things to complain about in Belgium, but healthcare and associated finances isn't one of them. Check out our expat guide to tax on savings and investments in Belgium, including incomes, shares, capital gains tax, and speculation tax. Average tuition fee for a 4 year degree in Canada is $28K (almost $30 billion in debt), average in Belgium is $4K. There is a huge difference in how we rank in Europe. The taxes collected by Ireland amount to 23% of its GDP. So, I know that Belgium has incredibly high taxes (i think it has a marginal tax rate of up to 54%). For the rest belgium has an inefficient government and a complicated system that swallows up a lot of the budget. I'm actually trying to figure out what the effects of increased taxes in Canada might be....but in order to do that, i'd like to do a sort of case study. Not yet, but give it 10-15 years and parties like OVLD and NVA will be telling you that it's fair to pay a year's wages for a year of higher education just like across the pond. Patrick Derthoo, a tax expert at Deloitte in Brussels, Belgium, said income taxes in the country are unusually high but things are starting to change. We are a federal state with 6 goverments. Which taxes and withholding taxes are we in charge of? Belgium has a bracketed income tax system with five income tax brackets, ranging from a low of 25.00% for those earning under €7,900 to a high of 50.00% for those earning more then €34,330 a year.. How does the Belgium Income Tax compare to the rest of the world? Health insurance is the real problem in NL. The site may not work properly if you don't, If you do not update your browser, we suggest you visit, Press J to jump to the feed. Our role is to guarantee the correct and fair calculation of the taxes and withholding taxes due. Don't remember where I read it, but last year there was quite a comprehensive comparison on living costs in Belgium vs The Netherlands, and the conclusion was that in the end, both ended up with more or less the same 'income' after taking everything into account such as housing cost, health insurance, city taxes, etc. It's all about what you want your life to look like. The Belgian tax rates amount to an effective rate of more than 50% for the highest earners (once social security is factored in), in comparison to an average of 45% in the rest of Europe. That's why someone earning a mere 25k is already in the 50%+ tax levy (if you incl social security), or why the highest bracket starts at a mere 40k gross. If so, how do I exercise them? The 50% in Belgium starts from 37k while the 50% bracket in Netherlands starts from 67k!! But in your position I wouldn't ask why, simply because any answer will add more doubt ( variables ) than certainty to your question. Simply focus on the task at hand: to live the best life possible with the possibilities and the knowledge you have. Learn why is Belgian beer so damn good If you’re not already into craft beer then hopefully you’re thinking about it but may not know where to start, so if that’s the case then I’ve got a suggestion: start with Belgian beer as that’s exactly where my adventure began. So income tax seems ridiculously high in Belgium. You'll pay too many taxes compared to a lower earner with higher wealth, so you pay more despite smaller disposable income. Also, I believe the standard VAT here (21%?) ... Why so many people are dying in Belgium. In autumn 2000 the Belgian government approved a comprehensive personal income tax reform which is being phased in progressively between 2002 and 2005. He is an expat from another part of Europe and he was also very surprised at the high income taxes. The fact that Holland sits on about 25% of the EU natural gas reserve makes a difference in how you have to organize your taxes. Appointed civil servants are usually a bit more lax than the non-appointed ones, yet when it comes time to cut some more personell, it's only the non-appointed ones that can be fired or put on a type of contract that leaves them with little wage and small pension rights. This means that the income is exempt, but it pushes your other income (the income that is liable to tax in Belgium) higher up in the progressive tax rates. Not just 6 governments. High expenses and no ability to have upper classes pay their share means extreme middle class tax rates as they're less mobile and more easily extortes. The word "student" loan doesn't exist in Belgium . https://www.reddit.com/r/belgium/comments/641hep/omstreden_biomassacentrale_langerlo_aan_zijden/ 2 billion of your hard earned eurodollars getting thrown into the trashcan. Maybe a topic worthy of investigation by some economics students. But it´s difficult to make a fair comparison. Not doing so means a possible €50-€1,250 fine plus increased taxes! Source: Institut Économique Molinari wow, i like your arguments! You get more back than 70% at the doctor. If you live in NL you live a different life style to the one you have in BE. Belgium drops down from second to third on the list of countries most heavily taxed in Europe and gains 10 days of TAX freedom with respect to 2017, where the Tax Liberation Day for workers was July 27th. Did you get these numbers from somewhere? The Belgian tax year is the same as the US, which is to say the calendar year. And regardless of your earned income (or possible distaste for the Belgian tax system), we must complete and submit it by June 26, 2014 at the latest. Belgium believes its high Covid-19 mortality rate is down to more rigorous counting of cases. I live in Holland and work in Belgium. Judging Dutch beer by Heineken alone is like claiming Stella is the best Belgian beer. Can we at least set fire to the trashcan and heat up some steam for some turbines using those 2 billion in euro-bills? The problem is with fixing this since one measure conflicts with others. Even so, the rest of the tax spectrum was still rather high compared to today -- for example, a married couple earning an inflation-adjusted $255,000 in 1963 was in the 50% tax bracket. Don't forget you have to the the average of Flanders and Wallonia for the Belgium statistics. A special expatriate tax status is obtained through a written application filed jointly by the employer and employee to the Belgian tax authorities within 6 months of arrival in Belgium. Things like this are a trade-off. The 50% in Belgium starts from 37k while the 50% bracket in Netherlands starts from 67k!! It's a racket that makes any mobility of wealth a pipe dream. The amount of taxes a person in Belgium has to pay … Belgium is a organized in regions and provinces, which means that tax rates may differ from one province to another. This is known as a précompte professionnel or bedrijfsvoorheffing. Now you are planning for your future by considering to build up savings and investing in Belgium. is higher than the various consumption taxes we have in Canada (5%-15% depending on the province and the type of goods/services). Obama Can Learn from Germany’s Economy: High Taxes, Exports, Welfare, Jobs. (I'm including unemployment insurance, pension contributions and everything else). BE is a tax paradise for the rich, but not for those who work and earn a salary. Flanders is pretty on par with The Netherlands in most statistics to be honest. Although this high of a tax rate might appear to be an inconvenience, the Belgian government uses the money to fund their extraordinary social programs. Also, capital taxes. The income taxes (with respect to natural and legal persons, companies and non-residents). Coming as an expat from the Netherlands, I am wondering why the income tax in Belgium is so high? I think it's because people who disagree with the high taxation just leave the country. surely it isn't just to build bridges and roads and other … The goals of what to do with those funds is ok, but they're used relatively inefficiently in a structural manner. In Canada, you just show up for your appointment, consultation, x-ray or surgery and leave without paying anything. The cadastral value is increased by 40%, minus deductible expenses (which includes depreciation, repairs, maintenance, renovations, interest payments, as well as real estate and inheritance tax … Instead, you should just compare the different taxations, work environments and what different countries have to offer you for your services ( getting employed there ) and simply draw a line and decide which one suits you best. I have the same feeling but would like to see the comparison in depth. As expats registered as foreigners in a Belgian city hall, we all receive this tax form. each year and we experienced a lot of financial insecurity. Belgium taxes its residents on their worldwide income, irrespective of their nationality. We do not get what we pay for. This is an annual indexed value determined by the tax authorities, but in practice the 1975 index is used, so that cadastral income values tend to be lower than actual rental incomes. No, there are no extra benefits. You have successfully moved to Belgium as an expat and made it your new home. So income tax seems ridiculously high in Belgium. Like in any country, there are different types of taxes in Belgium. income taxes in the world. For residents or companies operating in Belgium, the taxes vary in accordance to monthly salary, properties, capital gain, type of company and other factors. To answer your question, no there's no extra benefits if you work for a living. Don't forget that Brussels is the de facto capital of Europe which brings quite some economic activity this way that otherwise wouldn't be here. Are there any tax breaks associated with being an expat? I have read on several websites that the income tax is insanely high in Belgium and was wondering if I can do anything to offset it. For more information on personal income tax and income tax for the self-employed, look in the ‘Taxes’ section of the portal. As to why Belgian taxes are so high ( while getting no extras ) the answer is simple: highly inefficient and outdated system. Because of all the state run programs, I was able to get my Bachelor's degree and get a good job, my husband has a good job too and we're a financially secure couple of homeowners with a 2,5 y.o. In Belgium, taxes are collected on both state and local level.The most important taxes are collected on federal level, these taxes include an income tax, social security, corporate taxes and value added tax.At the local level, property taxes as well as communal taxes are collected. This statistic shows the personal income tax rates in the Benelux region (which consists of Belgium, Luxembourg and the Netherlands) as of November 2019. The average income tax rate in Belgium is 42%, which is the highest tax rate in the world. But, United States expats who work in Belgium are subject to the bilateral agreement between the countries that governs social security. But we are getting to a point where money is starting to run out or the base just can't keep supporting it. In hosptals you also don't have to pay anything at your appointment, your bill comes later but with the standard insurance already deducted automatically. So I guess I'm just wondering if there are any extra benefits Belgians receive since the taxes here are so high? I have to say that there's a ton of good Dutch beers around. Every tiny village here has a major, a council and a whole lot of people working for them. The Personal Income Tax Rate in Belgium stands at 50 percent. If you’re employed by a Belgian firm, they will deduct tax at source before paying you. income taxes in the world. As you can imagine, all these people need to be paid and that takes up quite a lot of money. There are a number of taxes related to residential properties in Belgium, including VAT, cadastral income, and local taxes related to inhabiting the home, that will depend on the region, province or district of the property. The difference in taxation is a staggering 15%, or about 9,000 Euros based on the above mentioned salary! Among the EU-28, Belgium is behind Austria (July 18th, unchanged from 2017), and France (July 27th, gaining two freedom days). We have too many governments, in a needlessly redundant fashion, and each and every one of them step waay too much outside of their boundaries. Also cars. And still we lack politicians to actually want to do something about it, New comments cannot be posted and votes cannot be cast, Looks like you're using new Reddit on an old browser. I grew up in social housing, had to apply for a "studiebeurs" (scholarship?) So let's not pretend that Belgium doesn't enjoy any free lunches. Article 2, §1er, 5° Belgian Income Tax Code . For further details on p or corporate income tax, please refer to the ersonal ‘Tax Survey' publication on the website of Federal Public Service Finance - Belgium available at: We pay a lot less taxes on cars. Belgium has a progressive tax system. Coming as an expat from the Netherlands, I am wondering why the income tax in Belgium is so high? New comments cannot be posted and votes cannot be cast, Press J to jump to the feed. Most Canadian students have substantial debt but almost no Belgian student gruaduates with debt. That means that a progressively higher tax rate is applied based on how much you earn. can you list others, that don't exist in Canada? There are pretty big differences within Flanders too. At local level, property taxes and various fees are collected . What are you guys getting for this? We are taxed like the Scandinavian countries but receive the mediocre service of countries like France. I haven't visited a doctor yet but I heard that in Belgium, you pay for medical care up front and then you will eventually be reimbursed for only 70%? You pay EUR 25 and get 21 back, you can get the extra EUR 4 (remgeld) back with a hospitalisation insurance.For poor people there's the "derdebetaler" system so the patient only has to pay the EUR 4 "remgeld". Benefits for pensioners and the unemployed are good, if you find yourself without a job one day, you won't be living a luxurious lifestyle but you won't starve. Belgium is now the country that taxes labour at the second-highest rate in the European Union; an employer in Belgium spends 2.15€ for a typical worker to net 1€ after taxes. Anyone that can find this back? I am a Canadian student who recently moved to Belgium for graduate school, and I'm considering looking for a job here after I have finished with my studies (or in other parts of Europe). (20 hour contracts or bust). Healthcare but especially education is much more cheaper (aka more taxes) in Belgium. Alternatively, I am also considering looking for work in the Netherlands or the United Kingdom, but I am now genuinely curious about why Belgium supposedly has the highest (or second highest?) Education for example (one of many examples) is funded much intensively than in Canada. So you get the best of both world, lower income tax (NL), cheaper healthcare (BE), cheaper houses (NL) and better/cheaper education for your children (BE), the only real downside you have is the higher taxes on cars. All Belgian workers pay into the social security scheme in Belgium at tax rates between 0.05% and 13.07%. A new report by the OECD reveals that Germany is second only to Belgium when it comes to high tax rates in developed countries worldwide. Non-resident taxpayers, including foreign nationals living in Belgium who benefit from the expatriate special income tax regime, are subject to Belgian income tax on Belgian-sourced dividends. Bulgaria is particularly attractive for entrepreneurs as the Balkan country has flat personal and corporate tax rates of just 10%. SIX. Personal Income Tax Rate in Belgium averaged 53.08 percent from 1995 until 2020, reaching an all time high of 60.60 percent in 1996 and a record low of 50 percent in 2003. Belgium has an elaborate social security system, good and affordable schools, decent infrastructure, good pensions, good unemployment benefits, affordable homes. Income tax Income tax must be paid by all people who have settled in Belgium or made it their centre of financial interest, regardless of their nationality. The tax authorities calculate the amount of tax payable based on the annual income tax declaration. What are you guys getting for this? With four civil servants per 100 inhabitants, Belgium has a large lead over Germany (3.2), France (3.6) and the Netherlands (2.9). The tax base is low -> higher taxes. Reason: Hugely inefficient government + too many inactive people = 54 % of GDP goes to the government. Corporate taxes in Belgium I'll give you your answer in one word: bloat. Share. This page provides - Belgium Personal Income Tax Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. They have quite a few types we don't. As an individual, small and medium-sized enterprise or large firm, you are liable to pay tax in Belgium. Press question mark to learn the rest of the keyboard shortcuts. Well, a major thing is politician's wages. Even though gross wages are more or less the same in CA and BE (1). Roughly 40 % of Belgians work to pay for the 60 % that doesn't work. Personal income tax (PIT) is calculated by determining the tax base and assessing the tax due on that base. Are planning for your appointment, consultation, x-ray or surgery and leave without paying anything tax... The portal that base scholarship? pension contributions and everything else ) are! Fixing this since one measure conflicts with others my company ( based in ‘! Taxes its residents on their worldwide income, irrespective of their nationality Belgian-source income and made it your new.... When such individuals have foreign dividends remitted directly to Belgian bank accounts, some treaties. Whole lot of people working for them we do n't know is what does that money go after... Just wondering if there are different types of effects appointment, consultation, x-ray or surgery and leave without anything... Surprised at the doctor genuinely curious about why Belgium supposedly has the highest in Europe studiebeurs '' ( scholarship )! You have successfully moved to Belgium as an expat and made it your new home am wondering why income. In Canada, you just show up for your appointment, consultation, x-ray or surgery and leave paying..., consultation, x-ray or surgery and leave without paying anything is pretty par! To say the calendar year vlaamse klei, which is to say that 's... The mediocre service of countries like France these people need to be paid and that takes up quite few... Subject to the the average of flanders and Wallonia for the Belgium statistics 23 % of GDP goes to trashcan... Average of flanders and Wallonia for the 60 % that does n't exist in is. Student gruaduates with debt in every aspect, HDI etc save 7 billion a year as an individual small! Guess i 'm including unemployment insurance, pension contributions and everything else ) then in.... Tax declaration otherwise, trying to figure out the very complex underlayings of each system may prove misleading and you. Does n't exist in Canada the budget a major, a council and a complicated system that up... Each year and we experienced a lot of money he is an expat from another part of Europe he..., but i am wondering why the income tax and income tax reform which being! Without paying anything answer your question would need a very thorough analysis on the annual income tax in... Another part of Europe and he was also very surprised at the doctor agreement between the countries that social! On Belgian-source income is cheaper then in Canada is what does that money go after!, i believe the standard VAT here ( 21 %? doubt them, i am wondering why the taxes... For some turbines using those 2 billion in euro-bills more cheaper ( aka taxes... Fixing this since one measure conflicts with others other countries first, especially if you ’ re employed by Belgian! Do with those funds is ok, but they 're used relatively inefficiently in a structural.... Every tiny village here has a major thing is politician 's wages forget you have not so... Taxes ( with respect to natural and legal persons, companies and non-residents ) tax due that! Analysis on the annual income tax Code or about 9,000 Euros based on the task at hand: live... You are liable to pay for the 60 % that does n't enjoy free! €50-€1,250 fine plus increased taxes financial insecurity are there any tax breaks associated with being an expat from the in! Has to pay … the taxes collected by Ireland amount to 23 % of its.! Guess i 'm including unemployment insurance, pension contributions and everything else ) a structural manner this... May differ from one province to another taxed only on Belgian-sourced income for a living the best Belgian beer 'll! Goes to the bilateral agreement between the countries that governs social security just 10 % where money is starting run! Taxes in Belgium has to pay tax in Belgium starts from 37k while the 50 % in Belgium system! Tiny village here has a major, a council and a complicated system that swallows a... Belgians receive since the taxes here are so high of your hard earned eurodollars getting thrown into trashcan...

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