pwc - final immigration services russia - june 2013

Guide for Russian employees working in Belgium

www.pwc.be

June 2013PwC Belgium

Immigration Services• Immigration

• Tax

• Socialsecurity

• Labourlaw

• Sociallawformalities

PwC BelgiumImmigrationServices

1. Immigration formalities 5

1.1 General 5

1.2 Work permit 6

1.3 Residence permit formalities - Registration with Belgian municipality 10

2. Tax formalities 13

2.1 Residence 13

2.2 Belgian taxation of residents 13

2.3 Belgian taxation of non-residents 18

2.4 Tax filing obligation 20

3. Social law obligations - “Social documents” 22

3.1 Limosa 22

3.2 “Social documents” 22

3.3 Applicable labour law during assignments 23

4. Social security 24

2 - PwC Belgium Immigration Services

PwCGlobalImmigrationServices

Wealsoensureacorrectsocialsecuritycompliancefilebye.g.alsorequestingacopyofthecertificateofcoverageinthecountryoforigin(ifapplicable).

Finally,wehandlealsootherlegalformalities(likethe“firstdayelectronicnotification–limosa”).

Throughthismultidisciplinaryapproachwehaveatanymomentintimethefullcompliancecircleguaranteedleadingalsotoefficiencies(sharedinformationbetweenHRLaw&Taxteam,onequestionnaireetc…).

Pleasenotethatwehaveaquiteintensecooperationwiththeimmigrationandsocialsecurityauthorities,thatjointpresentationsweregivenwiththemandthatwearealsoteamingupwithFlandersInvestmentandTrade.

Global coverageProvidingthebestimmigrationsolutionsgloballydependsonhavingexperiencedprofessionalsonthegroundlocally.Wehavethelargestimmigrationnetworkintheworldcoveringover100countries.

InBelgium,wehaveanHRLawteamof30 clientfacingprofessionalsofwhich15 personsaredealingwithimmigrationquestionsonadailybasisandtryingtofindthebestsolutionforeachsituation.

Immigration, social security, employment law and tax compliance combinedItisbecomingincreasinglycommonforacountry’simmigration,socialsecurity,employmentlawandtaxauthoritiestocommunicatewitheachotherandshareinformation.Itisessentialtomakesurethatthereistotalconsistencyinthepresentationoftheemployee’spositionfrombothanimmigration,asocialsecurity,employmentlawandincometaxcomplianceperspective.

OurimmigrationspecialistsareworkingwithinourHRLawteamsothiscombinedapproachiscertainlyguaranteed.

Indeed,uponrequestoftheclient,wecanguaranteeafullcompliancecirclemethodologywherebyitallstartsfromthebeginningwithalignedassignment/employmentcontracts.

Whenweareinformedofanewcomingexpat,wealsoinformourtaxcolleagues(if involved)andforsomeclientsweeveninstructtherelocationagency.

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Visa and immigration services have been integral to the business of PwC for many years and form part of the suite of services provided to corporations who have an international focus and move people throughout the world.

PwC Belgium Immigration Services - 3

Wealsoofferthefollowingadditionalservices:

•workpermitrenewalsandresidencepermitextensions;

•serviceswithregardtothedrivinglicense;

•applicationsforpermanentresidency;

•serviceswithregardtohealthinsurance;

•serviceswithregardtoBelgiannationalityprocedures;

•passportrenewals;

•legalisationofofficialdocuments.

Business travellersCompaniesareincreasinglystrugglingtoachieveandmaintainfullcompliancewhilebalancingtheneedsofthebusiness,whichdemandstheswiftdeploymentofcriticallyskilledemployeesoverseas.Theproblemismuchgreaterinrelationtoemployeeswhotravelfrequentlyabroadonbusinessasfewcompaniesprovidefullcompliancesupporttothebusinesstravellerpopulation.AtPwC,wehelpcompaniesmanagetheimmigrationrisksassociatedwithbusinesstravel.

Scope of immigration servicesImmigrationrulesandproceduresvarysignificantlyaroundtheworld.WesecuretherightforyouremployeesandtheirfamilymemberstoliveandworkinBelgiuminfullcompliance.

Wecanalsobringyouincontactwithourcolleaguesfromourglobalnetworkforyouroutboundemployees(http://www.pwc.com/gx/en/legal/immigration).

ObtainingpermissionforaRussiannationaltoworkinBelgiumcommonlyentailsthefollowing:

•obtainingpermissionandworkpermitfromthelabourauthorities;

•obtainingavisafromtheBelgianEmbassy/Consulateinthecountrywheretheworkeriscurrentlylocated;

•registrationwiththelocalmunicipalityinBelgiumandobtainingaresidencepermitpostarrival.

Your Belgian key contact immigration persons:

[email protected] Partner +32 3 259 31 56

[email protected] Manager +32 3 259 31 76

[email protected] Principal Adviser +32 2 710 44 21


PwC Belgium - Global ImmigrationServices to Russian nationals

1. Immigration formalities

1.1 General

BeforerelocatingaRussianemployeetoBelgium,itiscrucialtoknowwhetherheneedsaworkpermitand/oraresidencepermit.Withoutthecorrectpermits,hecannoteitherworkorstayinBelgium.

1.1.1 Work permit

Inprinciple,everyRussianemployeeworkinginBelgiumhastobeinpossessionofaworkpermit,althoughsomecategoriesofworkersareexempted.

TheworkpermithastobeappliedforinBelgiumbythe(foreign)employer(oraproxyholder).

1.1.2 Visa requirements

InthecaseofastayinBelgiumofless than 90 dayswithinanygivenperiodofsixmonths,aRussiannationalhastoapplyforatypeC(shortstay)SchengenvisainordertoenterBelgiumandlegallystaythereforthatshortperiod.

Iftheirstayexceeds 90 days(canbeinterrupted)withinanygivenperiodofsixmonths,RussiannationalshavetobeinpossessionofatypeD(longstay)visainordertoenterthecountryandisrequiredtoobtainaBelgianresidencepermit,whichisanecessaryformality.

1.1.3 Residence in Belgium

ForastayinBelgiumofless than 90 days (withinanygivenperiodofsixmonths),Russiannationalshavetobeinpossessionofa“declarationofarrival”(officialdocument“Annex3”)issuedbytheirlocalmunicipality.ThisisissuedonthebasisofthetypeCvisaandisvalidfor90days.Wheretravellersstayinahotel,thehotelregisterreplacestherequirementofadeclarationofarrival.

IftheRussiannationalstaysinBelgiumformore than 90 days(withinanygivenperiodofsixmonths),aBelgianresidencepermit(electronicresidencecardA)hastobeappliedfor.Theapplicationhastobefiledwiththemunicipalityoftheindividual’splaceofresidence.


1.2 Work permit

Theemployerhastoobtainanauthorisation to employtheRussianemployee.Theemployeehastobeinpossessionofawork permit.ThesetwodocumentshavetobeobtainedpriortothecommencementofworkinBelgium.Inpractice,bothrequestsarefiledatthesametimebytheemployerorapersondulyauthorisedinthisrespect.Hereafterweonlyrefertothe“workpermit”forbothdocumentsastheyarelinked.

Inordertoobtainaworkpermit,theemployerorhisattorney-in-fact(PwCcanactinsuchacapacity)mustsendanofficial application form accompanied by a set of documentstotheregionalworkpermitauthorities.

Dependingontheplaceofwork,thiscanbetheFlemishRegion,theWalloonRegionortheBrusselsCapitalRegion.NotethattheproceduresforapplyingforaworkpermitareslightlydifferentineachRegion.

Theregionalauthoritieschecktheapplicationandmakethefinaldecision.

Afterapprovaltheoriginalworkpermitwillbesenttothemunicipalityoftheemployerorhisattorney-in-fact,whichwillactuallydelivertheworkpermit.Theoriginalauthorisationtoemploywillbesenttotheemployerorhisattorney-in-fact.

Threetypesofworkpermitcanbegranted,i.e.workpermitA,workpermitBandworkpermitC.Themostcommonworkpermit,consideringtheemploymentwithinmultinationals,istheworkpermitB,whichhastobeappliedforbytheemployer.Theothertypeshavetobeappliedforbytheemployee(andexempttheemployerfromtheobligationtoapplyforanauthorisationtoemploy)andrelatetoveryspecificsituations.

1.2.1 Granting conditions for a “work permit B”

Generalconditions

Ingeneral,thelegislationconcernedplacesrestrictionsonthegrantingofaworkpermit.

Moreparticularly,aworkpermitmayonlybegrantedif:

•theemployercanprovethathecannotfindanemployeeontheBelgianandEuropeanemploymentmarketwithinareasonabletimeframewiththesamequalificationsastheforeignemployeehewantstohire(labour market criteria)

evidencingthatnoemployeecanbefoundontheEEAemploymentmarketwiththesameprofessionalskills,evenaftersometraining,israthercomplex.Infact,theemployerwillhavetodemonstratethathehassearchedextensively(byadvertisinginnewspapers,etc.)inordertofindanemployeewiththesamequalificationsontheemploymentmarket;

•thepersonconcernedisanationalofacountryBelgiumhasconcludedanagreementregardingmanpowerwith(Algeria,Kosovo,Morocco,Croatia,Serbia,Montenegro,Bosnia-Herzegovina,Macedonia,Tunisia,TurkeyandthenewEUMemberStates);

•aspecialemploymentcontracthasbeenconcluded,containingveryspecificprovisions,e.g.relatingtothecostofrepatriationandhealthcare.


Obtainingaworkpermitforacommonemployee(i.e.non-exemptedfromtheaboveconditions)isnot at all obvious.Itisacomplex and time-consuming procedure.Westressthattheauthoritieswillneedseveralmonthstotakeadecisioninthisrespect.

For a limited number of employee categories, these conditions do not have to be fulfilled. The two most common categories are highly qualified persons and managerial employees.

It is our experience that, for multinationals, it is usually possible to obtain a work permit if based on one of these two exceptions.

Highlyqualifiedemployees

HighlyqualifiedemployeeswhoearnagrosstaxableannualsalaryofatleastEUR 38,6651(non-taxableexpatriateallowancesnotincluded)willnothavetocomplywiththerequirementtofulfiltheconditionsrelatingtotheemploymentmarket,theagreementregardingmanpowerorthespecificemploymentcontract.

Thismeansthataworkpermitwillmostlikelybeissuedifalltheformalities(seebelow)arecompliedwith.Qualifications,positionandexperiencewillbetakenintoaccountinorderfortheauthoritiestodeterminewhethertheemployeeisindeedhighlyqualified.

AccordingtotheRoyalDecreeof6 February2003,highlyqualifiedemployeesmaybeemployedforamaximum period of eight years.

A restrictiononthevalidityofaworkpermittoeightyearsisnot applicableincaseswherethehighlyqualifiedpersonhassignedanemploymentcontractwiththeBelgiancompany(hasnotbeenpostedtoBelgium)andearnsagrossannualsalaryofatleastEUR64,5082.

Managerialemployees(personsinatopposition)

FormanagerialemployeeswhoearnagrossannualsalaryofatleastEUR64,5083,therestrictionsrelatingtotheemploymentmarket,theagreementregardingmanpowerandthespecificemploymentcontractarenotapplicableeither.

Theemployeewillreceiveaworkpermitforwhichno maximum specifications in terms of employment periodareapplicable.

1 Figure applicable for 2013. 2 Figure applicable for 2013. 3 Figure applicable for 2013.


Formalitiestofollow

Toapplyforaworkpermit,thefollowingdocumentisgenerallyneeded:

•amedicalcertificateissuedbyadoctorrecognisedbytheBelgianEmbassyorConsulateinthehomecountryorlastcountryofresidence.

Foryourconvenience,herebelowarethecontactdetailsoftheBelgianEmbassyandConsulateGeneralinRussia:

Belgian Embassy in Moscow UlitsaMalayaMoltchanovka,7121069MoscowRussiaTel:+7(495)7800331or41Fax:+7(495)7800332or42Email:[email protected]/moscow

Belgian Consulate General in Saint Petersburg11,SapernyPereulok191014SaintPetersburgRussiaTel:+7(812)579-579-1Fax:+7(812)579-95-01Email:[email protected]/saint-petersburg

•theemploymentcontractbetweentheemployeeandthe(Russian)employer;

•acopyofthenationalpassportoftheemployee(allpages);

•acareerresume;

•acopyofdegree(s);

•asetofpassport-sizephotographsoftheemployee;

•aserviceagreementconcludedbetweenthecompanyandtheBelgianclient(ifpossible).

In the case of an assignmentwealsorequireanassignmentletterandassignmentagreementtobetypedontheemployer’sletterheadpaperandsignedbytheemployeeandtheemployer.

In the case of a transferwealsoneedadeclarationoftheemployerconfirmingthatBelgian(employeeandemployer)socialsecuritycontributionswillbepaid.

Thework permitcanbeobtainedforaperiodof(maximum)12 months, and is renewable with a new period of (maximum) 12 months until the maximum period of employment is reached (forpostedhighlyqualifiedemployees).Oncetherequestisfiled,ittakesabout2to4weeksbeforetheBelgianregionalworkpermitauthoritiesdelivertheworkpermit.


1.2.2 Exemptions from the obligation to obtain a work permit

Inthecurrentlegislation,somecategoriesofpersonsareexemptedfromtheobligationtoobtainaworkpermitoranauthorisationtoemploy.Someimportantcategoriesare:

•spousesofBelgianorEEAnationals,undercertainconditions.

•employmentofnon-EEAnationalswithintheframeworkofaserviceagreementbetweenemployersestablishedin2EEAmemberstates.

•foreignmanagerialorexecutiveemployeeswhoworkontheBelgianterritory,providedthattheyareemployedbyBelgianheadquarters(i.e.underalocalemploymentcontract)andwillearnanannualgrossremunerationexceedingEUR64,5084;theregionalauthoritiesshouldbeinformedbeforethestartdate.

•foreignemployeeswhoareassignedtoBelgiumbytheirforeignemployertoattendscientificcongressesorclosedmeetings(so-calledbusinesstrips),providedthatthedurationoftheirstayinBelgiumdoesnotexceedthelengthofthescientificcongress,or(incaseofbusinesstrips)60dayspercalendaryear,withamaximumof20consecutivecalendardayspermeeting.

Insteadofanapplicationforaworkpermit,a“certificateofexemption”couldberequestedwiththecompetentimmigrationauthoritiesformostofthesecategoriesbeforetheassignmenttoBelgium.

1.2.3 European Blue Card

SinceSeptember2012itispossibleforhighlyqualifiedthird-countryemployeestoapplyforthe“Belgianversion”oftheEuropeanBlueCard(basedontheEU“BlueCardDirective”).

ItoffersthemtheopportunitynotonlytoresideinBelgiumbutalsotoworkherebasedupononesingledocument,anditintroducesamoreflexibleaccesstotheEuropeanterritoryforthemandtheirfamilies.

ConditionsforbeinggrantedaEuropeanBlueCard:

• Theemployeemustholdahighereducationdegreeforwhichthecourseofstudyextendedoveratleastthreeyears.

• TheemployeemusthavesignedanemploymentcontractwithaBelgian employerforanopen-endedperiodoratermequaltoorgreaterthanoneyear.

• Theemployee’sgrossannualsalarymustamounttoatleastEUR49,995(2013).

• Theemployeemustbeabletoproducevalidtraveldocumentsandmusthavehealthinsurancefortheperiodswhereheisnotcoveredbyrightsprovidedforunderhisemploymentcontract.

• Theemployeemaynotposeanydangertopublicorderornationalsecurity.

AnimportantcategoryofpersonswhohavenorighttotheEuropeanBlueCardarenationalsofthirdcountrieswhoareonasecondment.

4 Figure applicable for 2013.


WhataboutthecurrenttypeBworkpermit?

ThecurrenttypeBworkpermitforhighlyqualifiedemployeescontinuestoexistalongsidetheEuropeanBlueCard.Hence,inpractice,theEuropeanBlueCardaddslittletothealreadyexistingflexiblearrangementsinBelgiumforhighlyqualifiedormanagerialemployees.

TheexemptionfromatypeBworkpermitonlyappliestoforeignnationalswhoholdaEuropeanBlueCardissuedbyBelgium.Thisconcretelymeansthate.g.aRussiannationalinpossessionofaDutchEuropeanBlueCardwhohasajobofferfromaBelgianemployerstillneedstoapplyforanewBelgianEuropeanBlueCardbeforehecanstartworking.

TheemployeealsohastocomplywithalltheaboveconditionsforbeingrecognisedasahighlyqualifiedemployeewithinthemeaningoftheDirective.

1.3 Residence permit formalities - Registration with Belgian municipality

1.3.1 Obtaining a visa to enter Belgium

RussiannationalsmustalwaysbeinpossessionofavisatoenterBelgium.Differenttypesexist.ThetypeofvisathathastobeappliedfordependsonthepurposeandlengthofthestayinBelgium.

Incaseofastayofless than 90 days withinanygivenperiodofsixmonths,theRussiannationalmustapplyforatypeCvisa(shortstayvisa,e.g.businessvisa,touristvisa,visaforaprivatevisit,etc.)inordertoenterBelgiumandlegallystaythereforthatshortperiod.

Incaseofastayofmore than 90 days (canbeinterrupted)withinanygivenperiodofsixmonths,RussiannationalshavetobeinpossessionofatypeDvisa(workvisa,familyreunification,etc.)inordertoenterBelgiumandmustobtainaBelgianresidencepermit,whichisanecessaryformality(seefurther).

TheBelgianEmbassyandtheConsulateGeneralofBelgiuminRussiahaveopenedtheirownvisaapplicationcentresrunbyVFSGlobalServicesPvtLtd.inMoscowandSaintPetersburg.ThisserviceisavailabletoallnationalsresidinginRussiawhowishtoapplyforavisaforBelgium.

ThevisaapplicationsmaybesubmittedateitherofthetwocentresinMoscoworSaintPetersburgdependingontheEmbassy/Consulate’sspecifiedjurisdictions.AllvisaapplicationswillthenbeassessedbytheEmbassyofBelgiuminMoscowortheConsulateGeneralinSaintPetersburgonly.

Aswellasthetwocentresmentioned,theapplicantcanalsosubmittheirvisaapplicationfiledirectlytotheEmbassy.Inthiscase,theapplicanthastomakeanappointmentwiththevisasectionoftheEmbassy(+7(495)2762517).


Pleasefindherewiththecontactdetailsofthevisaapplicationcentres:

Visa application centre Moscow ShchipokStr.,bld11,block1 Moscow Tel:+7(495)2762517 Email:[email protected] Openinghours: Monday–Friday:9AM–4PM

Visa application centre Saint Petersburg BolshayaRaznochinnayaStr.16/7 TradeCenter“Chkalovskiy” 191014SaintPetersburg Tel:+7(812)4384217 Email:[email protected] Openinghours: Monday–Friday:9AM–4PM

WorkpermitholdershavetoprovidetheBelgiandiplomaticauthoritieswith:

• somevisaapplicationforms

• theoriginalworkpermit

• theirnationalpassport

• apoliceclearancecertificatedulylegalisedandtranslated

• setofpassport-sizedphotographs

Fortheaccompanyingspouse/children,additionaldocumentsareneeded(e.g.medicalcertificate,marriageandbirthcertificate,registeredrentalagreement,etc.).

EveryEmbassy/Consulatehasitsownrequirements.

DependingontheEmbassyorConsulateconcernedandonthenationalityoftheemployeeconcerned(e.g.someEmbassiesorConsulatesarenotauthorisedtoissueautomaticallysuchavisaandmustapplyfirstforapprovalfromtherelevantBelgianMinistry),thevisaDcanmostlybeobtainedwithinoneworkingweek.

For any additional information regarding the addresses of the visa application centres, opening hours and required documents, we refer you to the website at http://www.belgiumvac-ru.com.

1.3.2 Registration with the relevant Belgian municipality

Declarationofarrival-Shortstay

InthecaseofastayinBelgiumofless than 90 dayswithinanygivenperiodofsixmonths,Russiannationalshavetobeinpossessionofadeclarationofarrivalissuedbytheirlocalmunicipality.ThedeclarationofarrivalisissuedonthebasisofthetypeCvisaandhastobeappliedforwithinthreedaysofarrivalinBelgium.

Inthecaseofastayinahotel,thehotelregisterfunctionsasadeclarationofarrival.

1.3.3 Obtaining a Belgian residence permit - Long stay

Iftheemployeeandhisfamilyintendtostayformore than 90 dayswithinagivenperiodofsixmonths,theymustpresentthemselvestothelocalmunicipalityoftheplacewheretheyintendtoresidewithineightdaysofarrivalinBelgiumtoapplyfortheBelgianresidencepermit.

Aseachmunicipalitymayhaveitsownspecificrequirements,itisadvisabletocheckwhatthesearebeforegoingtothetownhall.


Thefollowingdocumentsshouldnormallybeproducedbytheemployeeand/ortheemployee’sfamily:

•theemployee’soriginalworkpermit;

•acopyofthefamily’sleaseagreement;

•eachperson’snationalpassport,bearingatypeDvisa;

•severalpassport-sizephotographs;

•theoriginalbirthandmarriagecertificateslegalisedaccordingtotheinternalproceduresofthecountrythatissuedthedocument-forthelegalisationprocedureinRussiaseetheweblinkabove;

•acopyofthecertificatesofabsenceofcriminalconvictionsusedforthetypeDvisaapplications(seeabove);

• aproofofmedicalinsurance;

•aregistrationfee.

Acertificateofregistrationintheforeigners’register(Belgianresidencepermit–electroniccard“A”)willbeissuedtotheemployeeoncetheaboveformalitieshavebeengonethroughandapositivepolicecheckhasbeendone.ThisBelgianresidencepermitwill,inprinciple,bevalidforthesamedurationastheworkpermit+30days.Thecertificateisrenewableforamaximumofoneyear,e.g.iftheworkpermitisextended.

Note

Underanexceptionalprocedure(section25/2ofRoyalDecree8October1981),theBelgianresidencepermitforasalariedworkerwithaworkpermitcanalsobeappliedfordirectlyattheBelgianmunicipalitywithoutfirsthavingavisaD.Pleasenotethat,inthatcaseitisveryimportantthatthecertificateofabsenceofcriminalconvictioncoveringthelastyearshouldbeavailablewhenregisteringwithouthavingatypeDvisa.Further,theproceduretobeinitiatedwithin90daysafterarrivalinBelgium.

Incase,however,thefamilymembersoftheRussianindividualwillalsocometoBelgium,thisexceptionalprocedurecannotbefollowedbythemandtheyalwaysshouldbefirstinpossessionofavisaD.


2. Tax formalities

2.1 Residence

InordertodeterminetheBelgianincometaxconsequencesofthesecondmentortransferofaRussianemployeetoBelgium,itisessentialtoestablishwhethertheemployeewillbetreatedaseitherataxresidentofBelgiumorataxnon-residentofBelgium.

TheBelgianIncomeTaxCode(BITC)definesBelgiantaxresidency.

AccordingtoBelgiantaxlaw,anindividualqualifiesasaBelgiantaxresidentifhehasestablishedhisdomicile orseat of fortuneinBelgium(BITC,article2,1°,a)andarticle3).

Thetermdomicileisdefinedastheplacewherethetaxpayereffectivelyandenduringlyresides,wherethefamilylivesandwherepersonalcontactsaremaintained(section3/7ofthecommentsontheBITC).

Theseat of fortuneistheplacewherethetaxpayermanageshisestateorwherethecentreofhisbusinessactivitiesislocated(notnecessarilytheplacewheretheproperties/assetsaresituated).

Belgiantaxlawprovidesforarefutable legalpresumptionthatanindividualisdeemedtohavehisdomicileorseatoffortuneinBelgiumwhenheisregisteredintheBelgianpopulationregisterofthemunicipalitywhereheisresiding.

Withrespecttothetaxresidenceofamarriedcouple(BITC,art.2,1°),aspecificruleapplies.ThetaxresidenceofamarriedcoupleisirrefutablydeemedtobesituatedinBelgiumwhentheresidenceofthefamilyislocatedontheBelgianterritory.However,Belgiantaxlawdoesnotincludeaprovisionacontrario(i.e.whenthefamilyresidenceislocatedoutsideofBelgium).

Adefinitionoftheterm“family residence” oftencomesdowntoafactualanalysis.InviewoftheapplicationofBelgiantaxlaw,afamilyresidencecanbedefinedasthecentreofday-to-dayfamilylifeorasthecentreofhouseholdinterests.

2.2 Belgian taxation of residents

ResidentsofBelgiumaretaxedontheirworldwideincome.Thetaxableincomecomprisesrealestateincome,incomefrommovableproperty,miscellaneousincomeandprofessionalincome.Foreachofthesecategories,therearespecificrulesforthecalculationofthenetincome:theserulesaredescribedhereafter.

2.2.1 Real estate income

Thetaxableamountofrealestateincomeisdetermined,accordingtothecase,eitheronthebasisofthecadastralincome(lumpsumnetrentalincome)oronthebasisoftheactualrent.Thetaxableamountisthenobtainedbydeductinginterestpayments(ifany)onloans.


Thedwellingownedandoccupiedbythetaxpayerrepresentsaspecialcase:thetaxableincomethereof(cadastralincome)isinprinciplegrantedataxreliefintheresidentincometaxreturn.

Generallyspeaking,interestonloansiseligibleforreliefifitrelatestodebtsincurredforthesolepurposeofacquiringormaintainingimmovableproperty.

Regardlesstheabovewhichrelatestoincometax,apropertytax(realestatetax)isdueoneachpropertylocatedinBelgium(somerareexceptionsexist).

2.2.2 Income from movable property (income year 2013)

Interest

IfaninterestispaidoutandcollectedviaaBelgianfinancialinstitution,inprinciple25%withholdingtaxesaredeductedbythebankatsource.

No(withholding)taxesaredueonthefirstEUR1,880.00ofinterestonBelgiansavingsaccounts(figureforincomeyear2013).Theamountexceedingthisthresholdwillbetaxedatarateof15%andwillbewithheldbythebankautomatically.

Dividends

IfdividendsarepaidoutandcollectedviaaBelgianfinancialinstitution,inprinciple25%withholdingtaxesaredeductedbythebank.

Schematic overview

Type Tax rate Declare in tax return

Interest bank account 25% Yes 3

Interest ordinary savings account 15% 1 Yes 2

Interest savings certificate 25% Yes 3

Dividends (stock without strips) 25% Yes

Dividends (stok with strips) 25% Yes 3

Dividend BEVEK-SICAV 25% Yes 3

1 excluding the exempt part of EUR 1,880.002 if > EUR 1,880.00 (per taxpayer, verify existence of several bank accounts)3 25%-tax already withheld: no declaration duty but declaration can be done voluntarily (may be beneficial)


2.2.3 Professional income

Professionalincomeisdividedinsixsubcategoriesof“earnedincome”:

•employee’ssalariesandwages;

•companydirectors’remuneration;

•profitfromagricultural,industrialandcommercialactivities;

•proceedsfromaliberalprofession;

•profitsandproceedsfromformerprofessionalactivities;

•replacementincome:pensions,earlyretirementpayments,unemploymentbenefits,healthinsurancebenefits,etc.

Inprinciple,earned incomecompriseswages,salariesandotherremuneration(includingbenefitsinkind)receivedonaccountofaprofessionalactivity.Reimbursmentsofexpendituresmadebytheemployeeonbehalfoftheemployerarenotconsideredasearnedincome.

Benefits in kindareinprincipletaxedattheactualvalueforthebeneficiary.Insomecases,thebenefitinkindistaxedonalumpsumbasisdeterminedbylaw(carorhousingprovidedbythecompany,etc.).

Stock optionsgrantedbytheemployerareconsideredasprofessional income andareinprincipletaxableupongrant(i.e.the60thdayfollowingthedayoftheoffer)iftheoptionsareacceptedinwritingwithinthis60-dayperiod.Iftheoptionsaretaxableupongrant,thebenefitinkindresultingfromtheoptiongrantisdeterminedonalumpsumbasis.TheresultingamountistaxedatthemarginalBelgianincometaxrate.

Thenetincomeisdeterminedinsixstages:

1. deductionofobligatorysocialsecuritycontributions;

2. deductionofactualorlumpsumprofessionalexpenses;

3. economicexemptions,notablytaxmeasuresinfavourofinvestmentand/oremployment;

4. clearanceoflosses;

5. awardofthe“assistantspouse”quotaandmaritalquotient;

6. compensationoflossesbetweenspouses.


2.2.4 Belgian income tax rates

Professionalincome(togetherwithrealestateincome,“current”alimonypayments(seehereafter)and–inveryexceptionalcases–movableincome)istaxedatthefollowingprogressivetaxrates:

Inadditiontotheabove,municipaltaxesareduevaryingfrom0%to10%ontheprincipalamountofincometaxesdue,calculatedonthebasisoftheabovebrackets.

Eachtaxpayerisalsoentitledtooneormorestandardtaxreductions(dependingontheindividual’spersonalsituation)asmentionedhereafter(amountsforincomeyear2013–amountsstilltobemultipliedbytheapplicabletaxrateinordertodeterminetheexactbenefit).Additionaldeductionsmightbegranteddependingonthepersonalsituation.

taxable income tax bracket % tax due tax on the bracket total

0 8,590 8.590 25% - 2,147.50 2,147.50

8,590 12,220 3.630 30% 2,147.50 1,089.00 3,236.50

12,220 20,370 8.150 40% 3,236.50 3,260.00 6,496.50

20,370 37,330 16.960 45% 6,496.50 7,632.00 14,128.50

> 37,330 50% 14,128.50

Belgian tax brackets in EUR (Income year 2013 - Assessment year 2014)

taxable income % expense on bracket total

1 5,650 28.7% 1,621.55 -

5,650 11,220 10.0% 557.00 2,178.55

11,220 18,670 5.0% 372.50 2,551.05

18,670 63,635.00 3.0% 1,348.95 3,900.00

Lump sum professional expenses (EUR)


2.2.5 Miscellaneous income

Thefinalcategoryoftaxableincomeincludesallincomewiththecommoncharacteristicsofnotbeingearnedbyperformingaprofessionalactivity.Thefollowingincome(non-exhaustivelist)isconsideredasmiscellaneousincome(undercertainconditions):alimonypayments,occasionalprofitsandproceeds,prizesandsubsidies,capitalgainsfrom(un)builtproperty,capitalgainsfromshares,exceptifrealisedwithinthenormalmanagementofone’sprivateinvestmentfolioandincomefromasubleaseorthetransferofalease.

Exceptforthe“current”(meaningno“arrears”)alimonypayments,thesetypesofmiscellaneousincomearetaxedatseparatetaxrates(varyingbetween10%and33%).Communaltaxesvaryingbetween0%and10%ontheprincipleamountofincometaxduearealsotobepaid.The“current”alimonypaymentsareincludedintheaggregatedtaxableincome(cf.supra)for80%.

Standard tax deductions EUR (basis amounts)

if taxable income not over 25,990 7,270

Standard tax deduction

if taxable income between 25,990 and 26,270

7,270 less difference between taxable income and 25,990

if taxable income above 26,270 6,990

Marital quotient 30% 1 child 1,490

Income limit 33,633.33 2 children 3,820

Limit 10,090 3 children 8,570

4 children 13,860

5 children 19,150

+ each child 5,290

< 3 years old 550

Standard tax deductions in EUR (year 2013)


2.3 Belgian taxation of non-residents

2.3.1 General principles

ABelgiannon-resident,i.e.apersonwhodidnotestablishhisdomicileorseatoffortuneinBelgium,isonlytaxableonhisincomereceivedfromaBelgiansource.

DependingonthetypeofincomereceivedfromaBelgiansource,theindividualmighthavetheobligatontofileaBelgiannon-residentincometaxreturn.Insomecases,thewithholdingtaxorrealestatetaxpaidwillbefinal.

RussianemployeeswhoworkinBelgiumwithoutestablishingtaxresidencywillinprincipleonlybetaxableinBelgiumifthesalarycostispaidby/bornebyaBelgiantaxresidentoriftheyspendmorethan183daysinBelgiumduringaperiodof12months.Profitsfromaself-employmentactivitywillinprincipleonlybetaxableinBelgiumincasetheywereobtainedbymeansofaBelgianestablishmentorresultfromactivitiesperformedinBelgium.

Taxableincomeofanon-residentissubjecttotaxatthesameratesasthetaxableincomeofaresident.Incasethenon-residentreceivesalsootherBelgiansourceincomesuchasrealestateincomeordirector’sfeesreceivedfromaBelgiancompany,theywillbeaddeduptodeterminetheincometaxableinBelgium.InvestmentincomesourcedinBelgiumorabroadisexcludedfromsuchaggregatedtaxableincomebutitshouldbenotedthatincertaincircumstancessuchincomemightbesubjecttoBelgianwithholdingtax.

Ifthenon-residenthasanabodeinBelgiumorreceives75%ofhisworldwideprofessionalincomefromaBelgiansource(orisaresidentofsomespecifictreatycountries),heisentitledtothesamedeductionsasaresident.Ifnot,thestandarddeductionsaredisregardedorlimited.

Anon-residentofBelgiumarrivinginorleavingBelgiumduringthecalendaryearisconsideredashavingnoabodeinBelgium.

2.3.2 Belgian special tax regime - General

Undercertainconditions,aforeignexecutiveassignedtemporarilytoBelgiumwithinaninternationalgroupofcompaniesmayqualifyfortheapplicationofthespecialtaxationregime.TheexecutivewillbetreatedforBelgiantaxpurposesasanon-resident,liabletoBelgianpersonalincometaxonhisBelgiansourceincomeonly.

Expatriateswhomayqualifyfortheapplicationofthespecialtaxregimearemainlymanagementpersonnel,researchpersonnel,andforeignpersonnelwithoutmanagerialresponsibilitieswhoaresohighlyspecialisedthattheirrecruitmentinBelgiumisverydifficult,ifnotimpossible.Toqualify,certaincriteriahavetobemet:

•employmentmustbeinaqualifyingentityorbranch.Thisincludesascientificresearchcentreorlaboratoryorabusinessunderforeigncontrolorpartofaninternationalgroup.Employmentcouldbeinacontrolandcoordinationofficeofamultinationalgroupofcompanies;

•employmentinBelgiummustbeofatemporarynature;

•theexpatriate’scentreofeconomicandpersonalinterestsmustnotbeBelgium.


AnexpatriatenewlytransferredtoBelgiumispresumedtobea“non-resident”andnotyetestablishedasaBelgianinhabitant.Hemust,however,providesupportingevidenceinaspecificapplicationfornon-residentstatus.

2.3.3 Belgian special tax regime - Benefits

Thespecialtaxregimerecognizesthatpaymentsmadetoanexpatriatebyanemployerfallinoneoftwodistinctcategories:

•basesalaryandforeignservicepremium,bothofwhicharetaxableinBelgiumtotheextentthattheyrelatetoservicesperformedinBelgium;

•expensesreimbursedbyanemployer,someofwhicharenottaxable(uptocertainlimits)fortheexpatriateandaretaxdeductiblefortheemployer.

Non-taxableallowances

Anexpatriatewillnotbetaxedonsupplementaryexpensesthatareincurredasaresultofhisrecruitmentortransfer/secondmenttoBelgium,whetherpaidaslumpsumallowancesorasspecificreimbursementsofoutgoings.TheBelgiantaxadministrationwilltendtoacceptasnon-taxablethosecostswhichanexpatriatewouldnothaveincurredifhehadcontinuedtoworkinhishomecountry.Thesenon-taxableallowancesaredividedintwoparts:non-recurringcosts(nolimitation)andrecurringcosts(tax-freeuptoalimitofEUR11,250orEUR 29,750forexpatsworkinginacontrolorcoordinationoffice).

Non-recurringcostsandexpensesthatarenon-taxableinclude:

•costsandexpensesincurredinmovingtoBelgium;

•costsofpreparingaccommodationinBelgiumforoccupancy;

•costsandexpensesincurredinmovingoutofBelgium.

Recurringcostsandexpensesthatarenon-taxable(withincertainlimits,exceptforschoolfees)include:

•thesupplementarycostofaccommodationandcostoflivingcomparedwithcostsinthehomecountry;

•schoolfees(primaryandsecondaryeducation);

•annualtravelcostsforanexpatriateandhisfamilytohishomecountry(airtravel,economyclass);

•lossincurredbyhisinabilitytorentout,ortoobtainanormalmarketrentforaccommodationretainedinhishomecountry;

•travellingexpensesresultingfromemergencies(deathorseriousillnessofclosemembersofhisfamilyorofthespouse);

•exchangeratefluctuations;

•taxequalisation;

•travellingexpensesofchildrenatschoolabroad,incurredforthemtovisittheirparents,notexceedingtwotripsperyear.


Travelexclusion

Inadditiontothenon-taxableallowancesdescribedabove,thepartofthesalaryrelatingtoservicesthatarerenderedoutsideBelgium(andwhichcanbeidentifiedassuch)isnotsubjecttoBelgiantaxes.Intheabsenceofanyotherspecificidentification,theproportionofoverallremunerationrelatingtoworkdaysspentabroadisexcludedfromtaxableincome.

Totalworkingdaysinthe(tax)period(inBelgiumandabroad)normallymaynotincludeSaturdays,SundaysandBelgianpublicholidays,nordaysofsicknessorannualvacation.

Incalculatingthenumberofworkingdaysabroad,thedayofdepartureisconsideredasspentinBelgium,withtheexceptionthatone-daytripsabroadareacceptedasqualifyingdaysspentabroad.AdayofreturnisdeemedtobespentoutsideBelgium.Inaddition,weekendsandpublicholidaysmustbeexcludedeveniftheyarespentabroadonbusinesstrips.

Theexpatriatemustprovideevidenceofthenumberofworkingdaysspentabroadandthatthesedayswerededicatedtoperformingbusinessduties(assignmentinstructions,hotelbills,airticketswithboardingpass,passportvisas,proofofattendanceatmeetings,etc.).

2.4 Taxfilingobligation

Ingeneral,employeesworkinginBelgiumandwhoaretaxedinBelgiumwillneedtofileaBelgianincometaxreturneachyear.Thefiscalyearisacalendaryear.

ThetaxreturnisissuedtotheemployeeindividuallybytheBelgiantaxauthoritiesafterthecalendaryearhasended.ForBelgiantaxresidents,thetaxreturnshouldinprinciplebefiledbefore30 Juneoftheyearfollowingtheincomeyear.Fornon-residentsofBelgium,theduedateisusuallypostponeduntilSeptember(orlater)oftheyearfollowingtheincomeyear.

Please bear in mind that a tax filing obligation may also exist in Russia.

The following calculation is done to determine the “default” exclusion for services rendered abroad.

number of working days spent abroad Travel exclusion = total number of working days during the period


3. Social law obligations - “Social documents”

On1April2002,aBelgianAct(of5March2002)cameintoforce.ThisActimplementstheEUDirective96/71onpostingofemployeesandstatesthatemployerswithpersonnelhiredabroadornormallyworkingabroad,whileworkinginBelgium,havetodrawupcertain“socialdocuments”andhavetoobserveanumberofobligationsimposedonthembyBelgianemploymentlaw(generallyreferredtoas“sociallaw”).

Theseprovisionswillapplyregardlessofthelocationoftheemployerorthenationalityofthepostedemployee.Theapplicablesocialsecuritysystemorincometaxtreatmentisnotrelevanteither.

3.1 Limosa

ForemployeescomingtoworkinBelgiumtemporarilyorpartiallyandwhoare,inprinciple,notsubjecttotheBelgiansocialsecurityscheme,aLimosadeclarationwillhavetobefiledbeforethecommencementofworkinBelgium.

AlimitativenumberofcategoriesofindividualshavebeenexcludedfromtheobligationtofileaLimosadeclaration,suchasemployeesattendingscientificcongresses(notlimitedintime)orattendingclosedmeetingsinsofarastheirstaydoesnotexceed60calendardaysayearandtheirparticipationpermeetingdoesnottakelongerthan20consecutivecalendardays.

ForemployeessubjecttotheBelgiansocialsecurityscheme,aDimonadeclarationwillhavetobefiledbeforethecommencementofworkundertheBelgiansocialsecurityscheme.

Exemptionfromtheobligationtokeep“socialdocuments”

AsaresultoffilingtheLimosadeclaration(seeabove),theforeignemployerwillbeexemptedfromtheobligationtodrawupthebelowmentionedsocialdocumentsforaperiodof12months.

Aftertheinitial12-monthperiod,theforeignemployerwillstillneedtodrawupthebelowmentioneddocumentsandappointa“socialrepresentative”(seebelow).

3.2 “Social documents”

Eachcompany,whenemployingpersonnelontheBelgianterritory,willberequiredtoprepare,keepuptodateandretaincertainemployment-relateddocumentsinordertoallowtheSocialInspectorateinBelgiumtoverifywhethereachcompanythatemployspersonnelinBelgiumcomplieswiththelaw.These“social”documentsmainlyincludethepersonnelregister,theworkregulationsandtheindividualpayrollaccounts.

3.2.1 “Social representative”

ThesesocialdocumentshavetobekeptbyanindividualresidinginBelgiumwhohasbeengivenproperauthorisationtokeepthesedocuments(i.e.thesociaal mandataris / mandataire socialorauthorisedrepresentativeforemploymentmatters).

Theauthorisedrepresentativeisinchargeofkeepingtheworkregulations,personnelregisterandindividualaccountsfortheforeignemployer.SomeoneofPwC,forinstance,canassumethistaskattheclient’srequest.


3.2.2 Work regulations

EachcompanywillbeobligedtodrawupworkregulationsaccordingtoBelgianlaw.Theworkregulationscontaincertainclausesregardingthesalaryandworkingconditionsapplicablewithinthecompany.Whendrawinguptheworkregulations,aspecificlegalproceduremustbeadheredto.

3.2.3 Separate personnel register

AllemployersemployingstaffthatarenotcoveredbytheDimonamustkeeparegisterofpersonnelemployedinBelgium.

3.2.4 Individual payroll accounts

ThisdocumentmustbedrawnupforeachemployeewhoworksinBelgiumandmustbedeliveredtotheemployeeswithinlegallyspecifiedtimelimits.TheindividualaccountgivesanoverviewofthesalarypaidduringthepastcalendaryearforworkperformedinBelgium.

Italsomentionstheemployee’s(foreign)socialsecuritycontributionswithheldfromhisgrosssalaryandtheincometaxdeductionsatsource,ifany.Inthecaseofanewhire,anindividualpayrollaccount,mentioningcertainlimiteddata,alreadyhastobedeliveredwithintwomonths.

Moreover,atthetimeofeachmonthlysalarypayment,aBelgianpayslipmustbeissuedandhandedovertoeachemployeeworkinginBelgium,evenifthesalaryispaidabroad.

3.3 Labour law applicable during assignment

WhenemployingpersonnelinBelgium,theforeignemployerwillhavetoobserveatleastthelabour,salaryandemploymentconditionslaiddowninBelgianlegaloradministrativeprovisionsorinapplicableCollectiveLabourAgreementsthathavebeendeclaredgenerallybindingandtowhichcriminalsanctionsapply.


4. Social securityEmployeeswhoworkinBelgiumareinprinciplecoveredbytheBelgiansocialsecuritysystem.InthecaseofanassignmentfromRussiatoBelgium,theemployeewillnotbesubjecttoBelgiansocialsecurityif:

1) theemployeedoesnotworkforaBelgiancompany;or

2) theemployeeisnotlinkedtoaplaceofbusiness(exploitatiezetel/sièged’exploitation)oftheforeignemployer’sinBelgium.

Thismeansthat,forassignmentsfromRussiatoBelgium,employeesmight,undercertainconditionscontinuetobesubjecttotheRussiansocialsecurityregime.Atpresent,nospecialformsarerequired.

8www.pwc.com/socialsecurity

Belgium, June 2013.

© 2013 PwC Belgium. All rights reserved.

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