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Belgian income tax: The Bulletin's fully updated guide to filing your 2021 return
In these Covid-19 times, many of us are starting to go back to work having worked from home for over a year now. The government is trying to make life a bit easier with some tax measures - but they do not give us any respite for filing our taxes. 30 June is the deadline for filing paper tax returns. If you file online, you have another two weeks, until 15 July.
Yes, it's tax return time again. Whether you are new to Belgium or have been filing your tax return here for years, you may have several questions. We will address some of these questions and we will address some other questions you didn't know you had.
If this is the first time …
If you are new to Belgium, or if this is the first time you must file a tax return, these are a few of the things you need to know.
The first time you receive a tax return, it comes in the form of a brown envelope with a tax return and a form to prepare the tax return guide. Whether you receive a Brussels, Flemish or Walloon tax return depends on where you were registered on 1 January 2021.
You can file a paper tax return or you can file online. Four out of five taxpayers file online, and the number of people who prefer to file paper tax returns is dwindling. Please note that once you file online, the tax authorities assume that you will want to do so again, and they will not send you a paper form anymore.
In Belgium married couples and registered partners file jointly but they are taxed separately on the same tax bill.
In your tax return, you declare your income. You don't report your wealth. If you have overseas bank accounts or insurance policies, all you do is tick a box in your tax return and confirm that you have reported the accounts to the Belgian National Bank. You don't have to give any information about those but that does not mean that the taxman doesn’t have any information at all).
You don't have to calculate the tax yourself and you don't have to pay the tax immediately or enclose a cheque. This is because most tax is deducted at source; your employer pays your salary net social security and income tax. And if you receive a pension, tax is already deducted as well.
The tax withheld at source will normally cover the tax. However, you still have to declare all your income, and the tax bill will show whether you get any tax back. That may be the case if
- you have a mortgage,
- you pay a cleaner or helper with titres services / dienstencheques
- you have made some gifts,
- you pay alimony or child support,
- you pay for childcare,
- you pay premiums for legal expenses insurance.
- or you put some money aside for pension saving,
And if you have any savings, the bank deducts the tax "at source"; you don't have to declare the dividends or interest. However, if you have savings with an overseas bank abroad, you must report the income.
If you file in time, the tax bill will be sent to you a few months later, at the latest on 30 June 2022. You have two months to pay the bill; if the bill shows a reimbursement, that will come two months later as well.
If you want to calculate how much tax you will have to pay, you can calculate the tax anonymously on Taxcalc.
Taxes in corona times
We have already mentioned in the text above that Covid-19 has changed certain rules and habits.
You cannot visit the tax office to get help to complete your tax return, that has to be done over the phone (see “Help!?”).
You may have been forced to work from home and your employer could pay you a tax-free allowance of €126.94 for working at home, plus €20 (for the use of your own pc) and €20 for the use of your internet connection at home.
If you have been furloughed, you risk having a bad surprise. The tax authorities have withheld tax at source on your unemployment benefit at 15%; you risk having a big tax bill. Workers who are working in a neighbouring country are normally paying tax there. However, when you work from home, you pay tax here for the days you work at home. The Belgian tax authorities have accepted that the lockdown due to Covid-19 is a case of ‘force majeure’. As you cannot travel to work, Belgium has agreed with Germany, Luxembourg, France and the Netherlands that for the period of the lock down – from the middle of March 2020 to the end of May or June – the days worked in Belgium do not count as days in Belgium. This has been extended until June of 2021.
Self-employed workers could request a one-year deferral of the payment of their social security contributions for the first two quarters of 2020. They could also request a reduction of the quarterly social security contributions if they think that they will be earning substantially less. However, deferral does not mean waiver; the social security contributions will have to be paid.
Self-employed will have less expenses, no restaurants means no restaurant bills and a deferral of social security contributions means that they cannot be deducted.
More from our 2021 income tax guide
- When do I need to file my Belgian income tax return?
- Online or on paper?
- Filing online
- Understanding the paper tax return
- Checklist: What documents do you need?
- The return in detail
- Belgian income tax: There's nowhere to hide
- A guide to cross-border taxation
- Belgian income tax returns for families
- Help! Where to get assistance with your tax return
- Understanding your Belgian income tax bill
- How do I appeal?
- This guide was written by Marc Quaghebeur, an international tax lawyer and partner at Cabinet DAVID. It is a general introduction based on current understanding of the law. It is not to be taken as a suitable alternative for individual advice.