When you have a small business, the usual practice is to have an accounting service to take care of all relevant paperwork for you, because the intricacies (especially if you’re not that familiarized with it) can be tricky and confusing. But if you want to venture on your own – nothing wrong with that! Who doesn’t appreciate a risk-taker? Continue reading How to prepare your business for the taxes
Belgium is a founding member of the European Union, hosting a large part of its institutions. This, it plays an important role for the European and international politics. It is industrially developed and economically prosperous. Moreover, Belgium has a very developed business and services industry. The country is divided into three parts: Flanders, Wallonia and Brussels – the capital. With almost one million inhabitants, Brussels is an economic and governmental center. It is a truly cosmopolite city and the administrative headquarters of the EU.
The common system regarding VAT (Value Added Tax) is applied to production and distribution of purchased and sold goods and services (within the European Union) in view of consumption.
In order to guarantee the tax neutrality, indifferent of the transactions number, nontaxable people can deduce the sum equivalent to the tax they have paid to other taxable persons from their VAT account. In the end, the VAT is supported by the final consumer, under the form of a percentage that is added to the final price of goods or services. After the exercitation of the deduction right, the taxable economic agents that have participated at the economic cycle, transfer the VAT sold to the state budget.
a) End to the 309% penalty. Belgium used to have a law against business owners who made private expenses look professional and eventually have their companies pay for it. These operations called “secret commissions” used to be penalized by increasing the contested amount by 309% and added it as a professional income. By doing so the administration would increase your taxable base, forcing your company to pay a higher taxation upon your profits.
There are many factors you should consider when deciding whether to handle your finances on your own or with the help of an accountant in Brussels. With the variety of online resources and software packages available today, individuals and businesses may try to manage their money on their own at first. However, many soon change their minds about this approach after running into a complex financial situation that they are not prepared to deal with.
Tax returns can now be filled on-line! All you need is your Belgian ID card, a card reader and a pin code which you obtained when you signed up at your local city council.
Each year at the same time the brown envelope containing your tax returns lands in your mailbox. More Belgians choose to fill it electronically with Tax-on-web. Last year, 3.4 million (and counting!) completed it online. Here are of the main advantages of Tax-on-web:
No worries, VAT doesn’t increase !
However, the Belgian government has recently introduced a new red-tape which will complicate administrative tasks of profit companies wishing to deduct their VAT from their professional acquisitions.
VAT (Value Added Tax), is a European tax affecting consumers. When a consumer purchases goods on European soil that person is entitled to paying VAT (21% in Belgium). Businesses and freelancers operating on a B2B modality are usually exempt from paying it, as long as their purchased goods are intended for the sole purpose of their professional activities.
Companies and people that are considered as Belgian residents must declare their entire revenues. As previously discussed, a Belgian resident is a person or an entity that has its centre of interest and/or manages its assets from Belgium.
There are four possible taxable revenues:
1. Professional revenues
2. Financial revenues due to dividends and interests exceeding 1,700 EUR/year
3. Real estate revenues
4. Other (anybody who speculates such as venture capitalists or financial investor).
Who is taxed in Belgium?
Almost everybody !
Some people are just taxed more than others due to their resident status. There are in fact two statuses that a person living in Belgium can acquire: Belgian Resident and Non-Residents. A word or two about both may help you shape your tax entitlement and figure out your future in Belgium.
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An expatriate tax allowance is a reimbursement of certain expenses granted to professionals who gain an expatriate status in Belgium. The basic idea surrounding this allowance is to protect foreigners who would see their financial status affected negatively as a consequence of living and working in Belgium.