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Advantages / disadvantages of an expat contract

HI all,
I got 3 interviews with an international company in Belgium.
After  2 months, they provided me 2 offers:
1- A contarct with belgian residence: my net salary will be around 1900 euros.
2- An expat contract: my net salary will be around 2400 euros.

DO you know please advantages / disadvantages of an expat contract ?
Which one shall i prefer ?

Regards
zied007

Hello,

Belgium has an attractive special tax regime for foreign nationals working in Belgium offering significant benefits and decreasing the cost of employing individuals in Belgium.

Expatriate concessions
The benefits are in four forms:
1. The individual is considered as a deemed non-resident for Belgian income tax purposes Personal income of non-Belgian source (interest, dividends,…) is not taxable and should not be reported on the Belgian income tax return.
2. Expatriate allowances or expense reimbursements are (partially) tax-free. The expatriate allowances or expense reimbursements received by the employee to cover the costs incurred as a result of the employment or secondment to Belgium will not be considered as taxable income. Non-recurring expenses (moving costs, installation costs) are not subject to Belgian income tax without any ceiling (if conditions are fulfilled). Recurring allowances or expenses paid during the employment in Belgium (cost of living differential between Belgium and the home country, housing differential, the difference in income taxes, the annual home leave, etc…) are in principle tax free subject to an annual ceiling of EUR 11.250 or EUR 29.750. The higher ceiling of EUR 29.750 is applicable for
activities of a controlling or coordinating nature or for scientific research. School fees paid or reimbursed by the company are not considered as taxable income (without any ceiling) (if conditions are fulfilled).
3. Remuneration relating to the days worked outside of Belgium is not taxable in Belgium (travel exclusion).
Employment income is only taxable to the extent that it relates to activities in Belgium. The exclusion of non-Belgian
remuneration is calculated according to presence rules provided by the Belgian tax authorities. Proof of the
presence abroad for professional reasons is required.
4. Expatriate allowances or expense reimbursements are not subject to Belgian social security contributions.
Expatriate allowances or expense reimbursements are not subject to Belgian employer and employee social security contributions (if conditions are fulfilled). The benefits mentioned above can already be applied during the income year by adjusting the official withholding taxes taking into account the Belgian expatriate tax regime.

Conditions
Both the qualifying company and the employee need to meet a number of conditions to be able to benefit from the Belgian expatriate tax regime. The conditions can be summarized as follows:
1. Qualifying company
The employer should be either a Belgian company — which is part of an international group — a subsidiary, branch office or permanent establishment of a foreign company —, which is part of an international group — a scientific
research center or a coordination office of an international group.
2. Individual
• The individual is not a Belgian citizen
• The employee should exclusively perform activities which require a special knowledge (specialist) and/or
responsibility, thus executive functions.
• The employment in Belgium should have a temporary nature
• The individual should demonstrate that he or she has maintained personal and economic ties abroad
• The individual has been assigned to Belgium by a foreign group company or has been recruited directly from abroad. The combination of the Belgian expatriate tax regime with a local Belgian employment contract is possible
3. Formalities
An application for the expatriate tax regime should be filed with the Belgian competent authorities within six months starting from the first day of the month following the month of the start of the employment or secondment in Belgium.

In conclusion, if you come on temporary basis, take the expat contract but if you want to stay take the resident one.

Thanks a lot phipiemar for your quick answer.
Do you see please any known disadvantage for this kind of expat contract ?
Regards
Zied

Hi,

It is written in conditions Chapter 2 & 3 --> Temporary basis / specific job so you can be fired on anytime / under belgian authorities decision for acceptance of your contract...

Dear Friends,

I have been offered a permanent position in an international company in Brussels. They insist to make an expat contract as it has the advantage of having a higher net salary.

I was wondering what are the drawbacks of having this type of contract on my residency in Belgium. I may try to stay there for a longer time, are they able to fire me whenever they want and avoid renewing my stay permit. Does this type of contract affect my pension program.

I would be really grateful if you would provide me the legal links describing pros and cons of having this kind of contract.

Thanks a lot,
A.

Welcome to the Forum arshia2002 :)

This post is over 2 years old, for a better response, I recommend that you start a new posting.

SimCityAT
Expat.com Expert Team

Discussed in thread: http://www.expat.com/forum/viewtopic.php?id=727088

In a nutshell, expat contract is only impacting your taxation scheme, nothing else.

Thanks for your guidance!
A.

One major drawback of having this type of contract is that you are considered as non resident, so if you aim to stay in Belgium and request a citizenship after 5 years of "residence", the time you spent in the country having this special tax status is not taken into consideration ! it's only after you quit this system that your 5 years counter will start !

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