Expat Q&A: Tax residency - a brief guide

When it comes to income tax, tax residence is a complex issue that is sometimes misunderstood by taxpayers. Many people assume that if you are domiciled in a country in the administrative sense of the term, the tax authorities will automatically recognise this address as your tax domicile. Unfortunately, it’s not that simple! Your tax residence varies according to several factors, including domicile, source of income, place of work, family home, and so on. So, what is tax residency? How do you avoid double taxation? And how do you obtain a tax residence certificate? The Expat Welcome Desk has all the answers to your questions!

1. Tax residency

What are the current rules?

Tax residency can be determined by two alternative criteria: the establishment of domicile (in the tax sense of the term) and the establishment of the primary location of assets. According to Article 3 of the Belgian Income Tax Code, "inhabitants of the Kingdom are subject to personal income tax". This refers to all people entered in the National Register of Natural Persons.

Attention: tax residency is defined as a de facto residence established and confirmed by a set of external indicators of a family, emotional or economic nature. However, this is a rebuttable presumption. A taxpayer who disputes that he is an inhabitant of the Kingdom may prove this by submitting any means of proof that he is not an inhabitant of the Kingdom even though he is entered in the national register of his municipality. The tax authorities will then assess the factual circumstances presented by the taxpayer.

Please note that tax residency varies depending on several factors. Consult a tax adviser if you have any doubts about the application of this concept.

Tax domicile

This is the place where a person establishes the essential centre of their vital (social, cultural, political, and so on), private and professional interests for a certain period of time. The domicile is characterised by a certain permanence and continuity.

Your tax domicile can thus be different from your civil domicile.

The primary location of your assets

The primary location of your assets is the centre of your economic activities or property interests. This is not necessarily the same as the place where the taxpayer’s assets are physically located, but rather the place from which these assets are managed.

Does my marital status affect my tax residence?

If you are married or legally cohabiting, your tax residence is in the country where your household is located. A married couple whose tax domicile is in Belgium will both be considered residents in Belgium for tax purposes.

What about EU officials and civil servants?

According to Article 12 of Protocol No. 7 of the TFEU, "Officials and other servants of the Union shall be liable to a tax, for the benefit of the Union, on salaries, wages and emoluments paid to them by the Union, in accordance with the conditions and procedure laid down by a European law. That law shall be adopted after consultation of the institutions concerned. They shall be exempt from national taxes on salaries, wages and emoluments paid by the Union." Civil servants who have been hired in their country of origin to work for a European institution (and who have no other source of income in Belgium) will in principle remain tax residents in their country of origin.

If, however, they worked in the Belgian system before joining a European institution, their tax residence will, in principle, be in Belgium.

Double taxation treaties

Many countries have signed double taxation treaties to avoid double taxation on the same income source. Taxation is divided between the State of residence and the State of the source of income. In some cases, the tax paid in the State of employment is deducted from the tax due in the State of residence. In other cases, income earned in the State of employment may be taxed in that country and thus be exempt from tax in the State of residence.

2. Tax residence certificate

What is it?

This is an official document issued by the authorities of the country in which you are a resident for tax purposes, certifying that your tax residency is in that country.

When do you need it?

You may need this certificate if you earned income in a country other than the one in which you are a resident for tax purposes. This authenticated document certifies your place of residence for tax purposes.

A tax residence certificate issued by the Belgian authorities (FPS Finance) is required if:

• You are a tax resident in Belgium;
• You earned income in a country with which Belgium has a double tax treaty;
• The benefits of this tax treaty apply if you provide the authorities of the foreign country with a tax residence certificate issued by the Belgian authorities.

Note: These three conditions are cumulative.

Formal requirements

The document requires an apostille or legalisation to authenticate it for use outside Belgium. Depending on the country requesting the certificate, the procedures may vary.

If you need a certificate of Belgian tax residence (as well as an apostille or legalisation), go to this web page (only available in NL or FR) to request it by e-mail or online.

For further information 

• FPS FINANCE - TAX RESIDENCE CERTIFICATE (ONLY AVAILABLE IN NL OR FR)
• FPS FINANCE - AGREEMENTS FOR THE AVOIDANCE OF DOUBLE TAXATION

The Expat Welcome Desk is a free service that advises internationals on the practicalities of daily life in the Belgian capital, from accommodation and residence permits to employment rights and taxation, among a number of topics.