The Belgian tax authorities have recently adopted a stricter, interpretation of Article 232 of the Belgian Income Tax Code 1992 that significantly expands non-residents’ income tax return filing obligation. As a result, many non-residents who own real estate in Belgium, including Belgians living abroad who receive exempt professional income (including pensions) from a Belgian source will now be required to file a non-resident income tax return and pay personal income taxes on their Belgian real estate.
The Belgian tax authorities intend to apply this new position retroactively. Given that the filing deadline for income year 2023 – 22 November 2024 -- is near, complying with this new interpretation may pose a challenge for non-resident taxpayers.
Before the adoption of the new interpretation, non-residents were required to file a non-resident income tax return only in two specific situations:
The recent revision broadens the filing obligation for non-residents who own Belgian real estate and receive Belgium-source wage income. These non-residents now must file a non-resident income tax return not only if they receive Belgium-source income, taxable in Belgium, but also if they receive non-taxable Belgium-source income.
For example, a non-resident who lives outside Belgium, receives a Belgian legal pension that is not taxable in Belgium based on a double tax treaty, and owns real estate in Belgium (whether rented out or not), will now be obligated to file a Belgian non-resident income tax return and pay personal income taxes on that real estate, even though it may have been exempt from personal income taxation in Belgium under the prior interpretation.
The change primarily affects non-residents who own Belgian property and have other income from Belgium, regardless of whether that income is taxable under Belgian law. This includes Belgian residents who have moved abroad and kept their properties in Belgium. Even if their Belgium-source pensions are exempt under double tax treaties, they must now file a non-resident income tax return and pay Belgian personal income taxes on their Belgian real estate.
This stricter interpretation significantly broadens the group of non-residents obligated to file Belgian non-resident income tax returns. It is crucial for affected individuals to assess their situation and ensure compliance with these new tax obligations and potential liabilities in Belgium.
For assistance or additional information on this new interpretation, please reach out to your usual tax consultant within BDO or the authors of this article.
Charlotte Lemahieu
Lien Maerevoet
BDO in Belgium
The Belgian tax authorities intend to apply this new position retroactively. Given that the filing deadline for income year 2023 – 22 November 2024 -- is near, complying with this new interpretation may pose a challenge for non-resident taxpayers.
Non-resident Income Tax Filing Obligation
Before the adoption of the new interpretation, non-residents were required to file a non-resident income tax return only in two specific situations:
- Income from Belgian real estate: Non-residents who owned Belgian real estate that was rented out if the total taxable income from these properties exceeded EUR 2,500 annually; and
- Taxable income in Belgium: Non-residents who received Belgium-source wage income that was considered taxable in Belgium under a double taxation agreement.
Impact of New Interpretation
The recent revision broadens the filing obligation for non-residents who own Belgian real estate and receive Belgium-source wage income. These non-residents now must file a non-resident income tax return not only if they receive Belgium-source income, taxable in Belgium, but also if they receive non-taxable Belgium-source income.For example, a non-resident who lives outside Belgium, receives a Belgian legal pension that is not taxable in Belgium based on a double tax treaty, and owns real estate in Belgium (whether rented out or not), will now be obligated to file a Belgian non-resident income tax return and pay personal income taxes on that real estate, even though it may have been exempt from personal income taxation in Belgium under the prior interpretation.
Who is Affected?
The change primarily affects non-residents who own Belgian property and have other income from Belgium, regardless of whether that income is taxable under Belgian law. This includes Belgian residents who have moved abroad and kept their properties in Belgium. Even if their Belgium-source pensions are exempt under double tax treaties, they must now file a non-resident income tax return and pay Belgian personal income taxes on their Belgian real estate.
Conclusion
This stricter interpretation significantly broadens the group of non-residents obligated to file Belgian non-resident income tax returns. It is crucial for affected individuals to assess their situation and ensure compliance with these new tax obligations and potential liabilities in Belgium.For assistance or additional information on this new interpretation, please reach out to your usual tax consultant within BDO or the authors of this article.
Charlotte Lemahieu
Lien Maerevoet
BDO in Belgium