Where duties are performed in Belgium, a charge to Belgian Social Security may arise. When the expatriate is treated as an employee, he/she will be subject to personal social security contributions of 13.07%. This rate applies to the monthly gross compensation and has no maximum limit. The employer will also be required to contribute about 25% of the relevant income and benefits to the Belgian social security system.
Social security contributions must be collected at source along with withholding taxes.
Different rates apply to self-employed activities, including activities of directors. For income year 2018, social security contributions are levied at a rate of 20.5% on net income up to €58,513.59 and at a rate of 14.16% on income between €58,513.59 and €86,230.52. Income in excess of €86,230.52 is not subject to social security contributions. The annual maximum contribution for self-employed activities is therefore €15,920.01 (increased by 3% to 5% for administration fees for the social insurance fund).
Mandatory social security contributions are deductible for income tax purposes.
An individual who is liable to Belgian social security contributions is also required to make a special social security contribution.
The maximum amount of this contribution is €731.28. The special social security contribution is not deductible for income tax purposes. For self-employed workers and directors, the special social security contribution is included in the above-mentioned rates for self-employed activities.
Where the expatriate is on a secondment from an EU jurisdiction and holds the relevant documentation (A1) an exemption to Belgian Social Security will apply (limited in time – usually five years).
Where the expatriate is on a secondment from a jurisdiction outside the EU with which Belgium holds a Bi-Lateral Agreement and the expatriate holds the relevant documentation (certificate of coverage), an exemption to Belgian Social Security will apply (limited in time).
Where the expatriate is transferring from a jurisdiction that does not fall into one of the above categories, the Belgian rules will determine his liability to Belgian social security taxes.
Expatriates benefiting from the special tax status who are subject to Belgian social security are allowed to exclude the tax free allowances also from social security. Moreover, under certain circumstances these tax-free allowances can be increased with the travel exclusion, resulting in additional social security savings (for both the employee and the employer).