Important Changes to the Belgian Expatriate Tax Regime

The former regime was based solely on a Circular dated 8 August 1983. As of 1 January 2022, a new statutory regime entered into force (see our previous article on this topic…). Due to a transitional measure, both regimes remained applicable in parallel until 31 December 2023. Since 1 January 2024, only the new regime is applicable.

While the new regime offers greater legal certainty, it is less attractive in several respects. In particular, due to:

• (i) the introduction of a minimum remuneration threshold (applicable only to the BNI), which limits access to the regime compared to the former framework; and
• (ii) the nominal cap on employer-specific expenses that can be borne by the employer in addition to the expatriate’s salary.

These changes make the new regime notably less appealing to highly paid expatriates.

Under the Easter Agreement, both of these conditions will be revised to restore the regime’s attractiveness. Subject to final parliamentary approval, these changes are expected to apply as from the 2025 income year.

1. Distinction between the BNI and the BRI

Under current Belgian tax law, a distinction is made between two different expatriate tax regimes:

• the Special Tax Regime for Inbound Taxpayers (BNI); and
• the Special Tax Regime for Inbound Researchers (BRI).

The BNI Regime

The BNI regime targets foreign employees and company directors who come to work in Belgium. It applies to individuals who are:

• directly recruited from abroad by a Belgian company, a Belgian branch of a foreign company, or a non-profit organisation (ASBL/AISBL); or
• seconded to Belgium by a foreign entity within a multinational group, provided they work for one or more Belgian companies, Belgian branches of foreign companies, or non-profits that are part of the same group.

The BRI Regime

The BRI regime, on the other hand, is specifically designed for researchers. These are employees recruited abroad to carry out research activities in Belgium. They may be employed directly by a Belgian company, a Belgian establishment of a foreign entity, or a non-profit organisation. Like under the BNI regime, researchers can also be seconded to a Belgian entity within a multinational group. The key difference with the BNI regime is that the BRI regime applies exclusively to employees and not to company directors.

The eligibility criteria for the two regimes differ, but the tax benefits provided under both regimes are identical.

2. Amendment Relevant Only to the BNI: Reduction of the Minimum Gross Salary from EUR 75,000 to EUR 70,000

To qualify specifically for the BNI regime, the employee or company director must receive an annual gross taxable salary exceeding EUR 75,000 for work performed in Belgium. Following the Easter Agreement, this minimum threshold will be reduced to EUR 70,000. This amount may be adjusted every three years in line with the smoothed health index.

The remuneration includes the annual gross salary related to services rendered in Belgium, before deduction of social security contributions, but excludes:

• severance payments,
• compensation for temporary loss of income, and
• remuneration exempted under Article 38 of the Belgian Income Tax Code (CIR 92).

Bonuses and other variable compensation not contractually guaranteed at the time of the BNI application should not be taken into account.

This minimum salary requirement applies solely to services performed in Belgium. In the case of a salary split, only the portion attributable to Belgian activities is considered for assessing compliance with the threshold.

The BRI regime, by contrast, does not impose any minimum salary condition. Instead, it requires a diploma relevant to research activities and is only applicable to employees, excluding company directors.

3. Amendment Relevant to Both the BNI and the BRI: Increase of Tax-Free Allowance from 30% to 35% and Removal of EUR 90,000 Cap

Under both the BNI and BRI regimes, employers may grant a tax- and social security-exempt lump-sum allowance of up to 30% of the gross salary, subject to a maximum annual cap of EUR 90,000.

This allowance is treated as a reimbursement of employer-specific expenses and may relate to:

1. one-time relocation costs;
2. housing set-up costs in Belgium;
3. school fees in Belgium for the children of the expatriate or their partner;
4. any other recurring expenses directly arising from employment in Belgium.

Following the Easter Agreement, the tax-free allowance will be increased to 35% and – more significantly – the EUR 90,000 annual ceiling will be abolished.

These changes are expected to enhance the competitiveness of the Belgian expatriate regime in comparison with similar schemes in neighbouring countries.

From a social security perspective, these allowances remain exempt from Belgian social security contributions and do not need to be reported in the DmfA declaration. However, employees benefiting from the special status (BNI or BRI) must still be reported using a specific code in the DmfA.

The employer must submit an application to the Federal Public Service Finance (FPS Finance) within three months of the employee’s start date. For employees who maintain their fiscal residence outside Belgium, a certificate of residency is required. FPS Finance then has three months to issue a decision. In the case of a change of employer, a new application must be filed.

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