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Income tax personal allowance

Phil Cole

Jul 3, 2016

Question

Hi all,

A tax question... can anyone explain to me how the Belgian personal tax allowance works for a EU citizen who is resident for tax purposes?

I've been trying to find an answer for quite a few days and I'm just coming across a number of websites which say different things. In the UK, every UK tax payer is allowed to earn £10,600 before any tax is paid. For anything that is earnt over £10,600, it's only that amount that is subject to income tax.

In this the case in Belgium? I keep seeing somewhere in the region of 7,070 euros mentioned as the personal tax allowance... does this work the same way as in the UK?

To give an example, if someone earns 50,000 euros in a year, do they pay no tax on the first 7,070 and then only the subsequent 42,930 is taxed, or does it work differently?

Thanks in advance!

adds

First the social security cost ( 13.3%) (B) is deducted from your gross income (A) then you have personal deduction (C). ( basic personal allowance is 6150 and for every child you will have an increase personal allowance)
You will be taxed on D= (A)-(B)-(C)

D will be splited into different tax base
Tax Tax Base (in EUR)
25 % up to 7 560
30 % 7 561 – 10 760
40 % 10 761 – 17 920
45 % 17 921 – 32 860
50 % 32 861 and over

Jul 3, 2016 21:01

Phil Cole

Hi ADDS, thanks for coming back. To test the above, can you let me know if my calculations are correct based on the above example of a salary of 50,000 euros?

Bands Rate Applicable Tax
7560 25% 1890
3199 30% 959.7
7159 40% 2863.6
14939 45% 6722.55
4339 50% 2169.5
Total 14605.35

So, based on a 50,000 euro annual salary, the tax payable would be 14,605 euros, assuming 50,000 - 6,650 (13.3% ss cost) - 6,150 (personal allowance), leaving 22,595 net per year Is that correct? It'd suggest a tax rate of only 29%, which from what I've read seems very low...

Jul 4, 2016 01:14

Phil Cole

Sorry, that should say...

So, based on a 50,000 euro annual salary, the tax payable would be 14,605 euros, assuming 50,000 - 6,650 (13.3% ss cost) - 6,150 (personal allowance), leaving 35,395 net per year. Is that correct? It'd suggest a tax rate of only 29%, which from what I've read seems very low...

Jul 4, 2016 01:15

Use a brut to net calculator. There are plenty online.

Jul 4, 2016 09:22

Phil Cole

I've used a few but they all give different answers, some differing by thousands per month, let alone per year.

If everyone gets a tax free allowance which reduces their tax liability, then that somewhat answers my question, if not bring any clearer on what I'd take home.

Jul 4, 2016 09:53

anon

Yes, everyone gets a tax free allowance. From 1st Jan 2016, the amount is €7,090.

Jul 4, 2016 10:49

becasse

Have you entered your partner into the equation? In Belgium, couples are taxed together, not separately as in the UK. You each get the personal allowances (and possibly other work-related allowances), other allowances (notably the substantial child allowances) are shared, and then the tax rate bands are applied to what is, in effect, the household income.

(It is more complicated if one partner works for an institution associated with the EU.)

Jul 4, 2016 11:42

adds

https://www.securex.eu/advice/Simulations/Public/BrutNet/BrutNetResultaa...

use the above calculator ( The tax amount vary depending on your personal situation)

You will also get deduction if you contribute toward pensions ( either through your employer or personal fund) roughly 1/3

Jul 4, 2016 17:34