Do I have tax obligations if I leave Belgium and live elsewhere?
An article by Segurantis published in Flemings in the World on 27/01/2021.
Segurantis regularly contributes to Flemings in the World.
You have decided to settle elsewhere. Wherever in the world you want to live is not a restriction in itself and many Belgians have gone there in recent years. Among the favourite holiday destinations of Belgians, France, Spain, Italy, Germany and Portugal are the favourites. This choice is also regularly seen once a decision has been made to settle elsewhere.
In most cases, Belgians emigrate mainly for economic reasons, i.e. for work. But Belgians also choose the warmer climate of the South. Especially retirees prefer the warmer weather to the inclement rainy scenario with an average of 199 days of precipitation per year (annual average in Belgium)[1].
Spain, a top seller among the Belgians
In this article we are going to focus on the Belgians who are retired or receiving benefits and who have settled abroad, but specifically in Spain. In other words, the Belgians who emigrated and still have some kind of income from Belgium. There is certainly an increasing trend that many retired or nearly retired people choose Spain as their country of residence to enjoy their retirement and leisure time[2].
The climate and facilities offered by the country are an attraction for the older generation as well as for people with physical problems or disabilities. Also the stable political system, the lower consumer prices for goods and the safe atmosphere make Spain very popular with our compatriots. In recent years, even more and more younger families choose Spain as a new location to settle. Viva España[3].
Administration on departure and arrival
Relocating your place of residence involves a lot of things. There are a number of administrative obligations which must be met in your country of residence before you can take the car or plane to live elsewhere. You cannot just close the door behind you and leave, you will have to deregister and inform the necessary administrative services in your municipality.
Especially for pensioners, it is important to clearly inform the services such as the municipality, the pension service, thetaxes and the services that manage your health care about your departure and where you will settle. You don't want to run the risk of not being entitled to social security in the country of your choice because you didn't take the right steps before you left. Or that once you arrive in your new country of residence, you will no longer receive a pension because they do not know where you will be resident for tax purposes in Belgium? Good preparation before your departure prevents problems afterwards.
You can count on help
Once your departure is finalised, there will of course be the administrative shop in the country where you will be settling. Some countries facilitate these administrative matters in a fluent orderly manner. You will often be addressed in English or French as the common language and you will soon be registered as resident. However, there are also countries where this administrative process is not so smooth and you may be sent from pillar to post because you do not have the right papers at the right time.
Especially in the southern countries, newcomers can sometimes be unpleasantly surprised if they have not first studied the working methods and culture of these countries. A good advice bureau or administrative office that knows the country but also understands its inhabitants is often the solution to get you registered correctly, quickly and without many hiccups so that you are a recognized resident of the country where you want to live. These offices can help you with your residency and your social security so that you are also helped in case of illness.
You are registered in your new country of residence, you are registered with the local social security and you have registered with the consulate. Once all this is done, the annual obligations come and they are mainly situated in the fiscal area.
Annual tax obligations
Every year there are tax obligations which residents (fiscal residents) within Spain have to keep in order. For somebody who lives in Spain and has an income partly or completely coming from another country, there will be tax obligations in the country that pays out the income. Between Spain and Belgium there are agreements to avoid double taxation, however this does not mean that you do not have to submit your tax return or other tax declarations to both countries[4]. Failure to do so may result in both Spain and Belgium claiming the tax. This is a subject on which there is a great deal of uncertainty and confusion , but one that is being strictly monitored by both countries. To know what you should do, we briefly explain below.
Who's paying me?
The first question you need to ask yourself in order to verify whether you still need to file a tax return in Belgium (as a natural person) if you are domiciled abroad is: Where is the origin of my income? Who or what department pays my income? This can be the following income:
- A wage
- A pension
- Rental income
- Independent activity
- …
If Belgium is still the country of origin of your income , you will have to declare this income and you will have to register in the non-resident tax return so that you can complete this tax return. If you have no income from Belgium, you do not have to submit a tax return and you are not taxable in Belgium. You must also report any changes in your family situation via this non-resident tax return.
Since we are talking about the group of pensioners in this article, we will explain below what pensions can be[5]:
- Pensions and annuities paid or granted by a resident of Belgium, by a public or private institution or company established in Belgium or by a Belgian establishment of a non-resident
- Pensions, annuities and allowances paid or granted by a non-resident, if:
- the contributions to the pension, annuity or allowance have given rise to a tax advantage for income tax purposes for the debtor of such contributions, or
- the professional activity by virtue of which the pension was paid or the allowance was granted was wholly or partly carried out in Belgium
Whether or not you have to pay tax depends on your situation, the income and the country where you live. In certain cases, Belgian income is exempt from tax in Belgium, which means that even if you file a tax return that mentions the income, you do not have to pay tax.
I live in Spain, I receive income from Belgium, what should I do and where do I pay taxes?
If you have a pension from the private sector or from a public body which exercises a commercial or industrial activity (SNCB, Bpost, Belgacom, etc.), you do not have to pay tax in Belgium on your Belgian pension. You must fill in Box I, Box III and Box XIII in the non-resident tax return and you must be especially careful not to fill in Box VI.
If you have a pension from the public sector (as a former civil servant or contracted civil servant) and you do not have Spanish nationality, your pension remains taxable in Belgium and you must fill out Box I, Box III, Box VI (your Belgian pension) and Box XIII for any income not of Belgian origin.
To conclude
We are writing about a subject that, from experience, is not the most popular subject for discussion. We have noticed from conversations with clients, from communication with the Belgian departments responsible for the non-resident tax return and via seminars that a lot of inaccuracies and half-truths are circulating. It is a subject that people push away.
The fact that you file your tax return in Spain is one point and that is usually emphasized by groups among themselves but also by offices that keep the annual Spanish tax return in order. But it does not stop there. It is important that you are assisted by professionals who maintain knowledge and relations with the Belgian authorities as well as being aware of the fiscal landscape in Spain. Belgium pays your income and is also responsible for your social security in Spain, so do not underestimate the importance of keeping your administration in order in Spain as well as in Belgium.
This article was written by Dimitri Vincent Neutiens, partner and founder of Segurantis. Segurantis is an Expatgestoria specialised in services for Belgian and British expats. Dimitri has enjoyed a training as an accountant in Belgium and can help you with the application and filing of these declarations. For everything that has to do with Spanish declarations Segurantis works together with recognised Spanish tax specialists and lawyers. For more information don't hesitate to contact us via the website or ask your question directly via info@segurantis.com.
You can read the article on the website of Vlamingen in de Wereld:
Find out more about Segurantis' tax services:
[1] Source: https://www.meteobelgie.be/klimatologie/waarnemingen-en-analyses/jaar-2018/2210-jaa-2018
[2] Source: https://www.viw.be/nl/beste-belgen-het-buitenland-wie-zijn-jullie-en-waar-wonen-jullie
[3] source: https://www.wereldreizigers.nl/wereldwijs/veiligste-gevaarlijkste-landen-europa/
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