14th January 2020
With a competitive corporate income tax rate and simple process of delivering Belgian payroll, this small European kingdom has proven lucrative for many businesses.
If you’re planning on sending US employees to Belgium, here are five key considerations to ensure a smooth payroll transition.
Key Actions for Belgian Payroll
- Plan the international deployment of your employees in advance.
- Seek advice from international payroll experts before committing to global expansion.
- Prepare to deal with at least 3 business languages.
Consider the tax consequences of secondment before employees leave the US.
Immigration requirements include work and residence permits
Every non-European Economic Area national who works in Belgium requires a work permit. As an employer, you must obtain the authorization to employ the employee before starting any work in Belgium.
To do this, you must file an application along with a set of documents to the relevant regional authorities. Belgium is divided into 3 regions:
- Brussels Region
- Flemish Region
- Walloon Region
Depending on the proposed place of work, you must submit the application to the appropriate authority in the correct official language.
Belgium work permit exemptions
Some foreign employees are exempt from the work permit obligation. Employees with a managerial or executive position are exempt, provided:
- they are employed by the Belgian headquarters;
- under a local contract of employment and;
- earn a gross annual salary of at least €66,405.
Foreign employees on business trips are exempt from work permits. If they are attending private meetings and their stay in Belgium does not exceed 60 days par calendar year, with a maximum of 20 consecutive calendar days per meeting.
Employees sent to Belgium to attend scientific conference are also exempt from work permits for the duration of any such conference.
Residence permit formalities
Non-EEA nationals, such as US employees, may need a residence permit (visa) to enter Belgium. The type of residence permit required depends on the purpose and length of their stay in Belgium.
- Short stay (< 90 days):For stays in Belgium of less than 90 days over any given 6-month period, a US national will not need a visa to enter Belgium; they will be able to enter Belgium on the basis of their national passport.
- Long stay (> 90 days):Any non-EEA national staying in Belgium for more than 90 days within a given 6-month period has to get a type D Visa in order to enter Belgium and obtain a residence permit.
Type D Visas
The national visa of “D” category is granted to certain individuals who are to be studying, working or permanently residing in one of the EU’s “Schengen countries”.
In order to enter Belgium, you also need to pay an admin fee. The proof of payment of this fee needs to be presented at the time of the introduction of the visa application. Should the applicant be unable to provide a proof of payment, the visa application will be deemed inadmissible.
This fee changes every year and depends on your circumstances. In 2019, unless you are exempted from payment of the administrative fee, you need to pay €358 when:
“You are applying to reside more than 3 months in Belgium in order to carry out professional activities, study in a private educational institution, carry out research, or for humanitarian reasons etc (articles 9, 9bis, 61/11 and 61/27, law of 15/12/1980 – article 25/2, Royal Decree of 08/10/1981);”
This is to be paid on top of the €180 handling fee of the Type D visa. The handling fee will still need to be paid at the time of the application. An exemption for the handling fee, does not necessarily imply that one is also exempt for the contribution.
Registration formalities with the local government
- Short stay (< 90 days): US nationals staying in Belgium for less than 90 days within a given 6-month period have to make a “Declaration of arrival” at the local government of the place they have chosen for residence in Belgium within 3 days of arrival in Belgium.
- Long stay (> 90 days): For stays of more than 90 days within a given 6-month period, US employees need a Belgian residence permit (“type A” electronic card). This requires registering with the local government within 8 days.
Each local government has its own requirements for the application for residence permit. FMP Global recommends you check local documents and language requirements.
Compliance with Belgian labour laws requires specific documentation
Working hours, public holidays, safety at work, salary protection and salary rates all differ in Belgium from the US.
So, in addition to immigration requirements, US businesses also need to comply with specific labour, salary and employment laws. Any employer engaging personnel in Belgium must set up and retain the ‘Labour documents’ to enable the Labour Inspectorate to verify that the employer is complying with the local laws
However, if you assign US employees to Belgium and make a Limosa declaration, your company will be exempt from setting up and retaining the labour documents for 12 months. You can use your equivalent US work documentation instead.
Every foreign employer who sends employees to Belgium temporarily or on a part-time basis is required to file a Limosa declaration before starting work.
US employees on business trips are exempt from filing the Limosa declaration if they are staying less than 60 days a year or are attending a conference.
As an employer, when you make the mandatory Limosa declaration, you enjoy a number of advantages:
- You do not have to prepare certain Belgian employment documents for the relevant mission:
- terms of employment;
- staff register;
- rules applicable to checks on part-time workers.
- You no longer have to draw up the individual employee account or payslip (per payment period), as long as you can present the equivalent employment documents drawn up in accordance with the legislation in force in the country of origin. A double administrative burden is thus avoided in relation to employees.
- By making the Limosa declaration, you improve your position on the Belgian market. Clients and principals will have a higher regard for you as a reliable partner.
Most employees working in Belgium are subject to the Belgian social security system. However a double taxation treaty between the US and Belgium means that employees are not subject to double taxation of income with respect to social security contributions.
Under the terms of the treaty, if the secondment of a US employee to Belgium is not expected to last for more than five years, the employee can remain subject to the laws of the US in relation to social security contributions.
Taxation in Belgium
The tax rate for Belgium ranges from 25% to 50% based on income. This variable rate changes annually, while the social security rates change every quarter. Companies must pay employer and employee contributions to the National Social Security Office quarterly. Employer contributions average between 32-38% and employee contributions amounting to 13.07% of gross salary.
Belgian payroll & HR solutions from FMP
FMP Global take away the stress of Belgian payroll and HR compliance. Our in-country teams are on hand to guide you in the right direction, offering advice at any time. Whether you’re looking for HR or payroll services in Bruges, Antwerp or Ghent, you can rely on FMP to take care of the complex payroll and HR processes so you don’t have to. All you have to do is get on with the important things – running your business.