The federal government has decided to significantly relax the regime starting from income year 2025. With these adjustments, Belgium aims to reposition itself as a competitive destination for highly qualified profiles within multinational groups.
Below, we outline the changes and briefly recap the principles of the special regime.
What has changed?
- The required minimum gross remuneration under the BBIB regime decreases from €75,000 to €70,000 per year.
- The maximum flat-rate expense allowance increases from 30% to 35% of the gross annual remuneration, and the original cap of €90,000 per year has been abolished.
This change broadens the scope of the regime and can result in a substantial reduction in labor costs for international hires. The increase in the flat-rate percentage for employer-related expenses creates additional room to design competitive compensation packages within multinational groups.
These changes apply to remunerations paid or granted as of January 1, 2025. Due to this retroactivity, a specific transitional arrangement is provided for inbound taxpayers who started employment from January 1, 2025 and initially did not meet the €75,000 remuneration requirement but do meet all other conditions and the new minimum threshold of €70,000.
These individuals can still apply to fall under the inbound taxpayer regime. The application must be submitted within 3 months, starting from the 10th day after the publication of the law in the Belgian Official Gazette.
The Special Tax Regime for Inbound Taxpayers (BBIB)
The BBIB regime applies to employees and company directors who meet the following cumulative conditions:
- Employment must take place in Belgium following direct recruitment abroad or when a foreign company within a multinational group assigns an employee to the Belgian entity of that group.
- The annual gross salary (taxable in Belgium) amounts to at least €70,000.
- During the 60 months preceding employment in Belgium, the individual must not have been a Belgian tax resident, not subject to Belgian income tax, and not have lived within 150 km of the Belgian border.
- The employer has submitted an application within three months from the start of employment.
The special tax status can be applied for a maximum of five years, with the possibility of a three-year extension.
Special Tax Regime for Inbound Researchers (BBIO)
The BBIO regime applies to employees in research roles who hold a qualifying degree and/or have at least ten years of relevant professional experience. The employee must demonstrate that they work within a laboratory or company leading one or more research and development programs. At least 80% of working time must be effectively devoted to research activities.
In principle, the same conditions as BBIB apply, but there is no minimum remuneration requirement for this regime, and it can only be requested for employees.
Tax Advantage
The employer may grant, on top of the salary, a tax-free expense allowance for recurring costs directly resulting from the assignment or employment in Belgium. This allowance is limited to 35% of the gross salary.
Additionally, certain exceptional expenses can also be reimbursed tax-free (e.g., moving and furnishing or children’s school fees).
These allowances are generally also exempt from social security contributions (employee and employer). However, it is not yet confirmed whether the social security authorities will accept the increase to 35% and the removal of the maximum amount.
Do you have questions about applying the special tax regime or want to know what this means for your organization? Feel free to contact us.