What are the implications of a secondment to Belgium ?

A secondment involves an employee being temporarily assigned to another entity within the same international group of companies. In some cases, the employee may even be seconded to a different employer altogether, like a client or a business partner.

The idea is that the former employer ‘lends’ the secondee to the host but remains their employer for the duration of the assignment. If the host employer is a Belgian company, the parties involved need to make sure that the secondment complies with the relevant Belgian employment, tax, and social security requirements.

If the employee arrives in Belgium and registers here, he will automatically be considered a tax resident who is liable here for taxes on their worldwide income. However, if the stay in Belgium is only of a temporary nature and the employee retains closer social and economic ties with their home country, they could apply for a non-resident tax status in Belgium instead. If this application is successful, the employee will only pay tax here on their Belgian source income.

In this context, the salary will only be considered taxable in Belgium if it is paid or the salary cost is borne by the Belgian host. If the salary is paid by the former employer abroad, the salary will not be taxable in Belgium if the employee stays (not only working) in Belgium as the country of employment for less than 183 days in any period of 12 months. As soon as the Belgian secondment lasts for more than 183 days, the salary will be taxable here and a Belgian tax return will need to be filed.

It is important to mention that a special tax regime is also available to certain foreign executives, specialists, and researchers who are temporarily assigned to Belgium. Under this special regime, the seconded employee can benefit froma tax exemption up to 30% of their gross salary. The Belgian expat tax regime was completely overhauled in the beginning of 2022.

The employee may also be exempt from Belgian social security for the duration of their secondment, within an EU context or if a bilateral social security treaty is in place with the home country. If certain conditions are met, the employee can continue to pay social security abroad while working in Belgium. This is typically demonstrated with a portable ‘A1’ document or with a certificate of coverage from a foreign social security authority. This ‘PD A1’ is normally valid for a period of up to 24 months.

Any foreigner working in Belgium, paying social security abroad, also must complete a mandatory LIMOSA declaration. This declaration enables the Belgian authorities to monitor any foreign employees that are active here but are not paying into the Belgian system.

TAXPATRIA® regularly advises on cross-border assignments and we make sure you are fully compliant when temporarily seconding employees to Belgium.