Droit Fiscalité belge

I. WHEN ARE PERMISSIONS TO EMPLOY AND WORK PERMITS REQUIRED ?

To employ a non-Belgian national in Belgium, an employer must first obtain permission from the competent immigration authority.

Moreover, if a non-national has come to Belgium in order to be employed before the employer could obtain the permission to employ, such permission will not be granted unless the employee belongs to a certain category such as:

- Non-Belgian highly qualified employee who stays in Belgium for less than four years, even if suitable labour can be found in Belgium to fill the vacancy, as long as his/her gross salary exceeds 31.073 € per year (floor amount for 2003).

- Non-Belgian executive who exercises a managing function in Belgium, as long as his/her gross salary exceeds 51.842 € per year (floor amount for 2003).

In addition, to work in Belgium, non-Belgian nationals must be in possession of a work permit.

In certain circumstances, the permission to employ and the work permit can be refused or withdrawn. If so, an appeal can be lodged by registered mail no later than one month after notification of the decision received by registered mail.

Exception

Workers who are not nationals of a country of the European economic area, who work for an employer based in a country of the European economic area (country X), where they have a valid work permit, may render services in Belgium without a Belgian work permit if:

- they have their residence in country X and have a valid residence permit in that country for more than 3 months (not a tourist visa);

- they have a valid work permit in country X for a duration exceeding the period spent in Belgium;

- they have an employment agreement with an employer in country X;

- they are working with the employer in country X for at least 1 year;

- they have a valid passport (issued by their country of origin) for a period exceeding with 3 months the duration of the services rendered in Belgium.

II. WHAT ARE THE RULES FOR ISSUING PERMISSIONS TO EMPLOY AND WORK PERMITS ?

In general, permissions to employ are only issued if no suitable local employee can be found on the labour market within a reasonable time. In addition, such permissions are only issued to nationals of countries that have signed international treaties concerning employment.

These rules do not apply for categories of employees listed in article 9 of the Royal Decree of 9 June 1999, modified by the Royal Decree of 6 February 2003, the most significant of which are highly qualified employees and executives, as explained above.

The documents that are required to be enclosed with the applications for a permission to employ a non-national and work permit are among others a copy of the individual employment agreement and a medical certificate (see Appendix).

III. REQUIRED LEGAL WORK DOCUMENTS

Every company, employing workers in Belgium, must file the following documents:

- A register of personnel, listing all employees in chronological order and containing certain specified information about the employer and each of its employees;

- The employer must also maintain for each employee an individual account listing certain specified information about the employer and the employee and giving full details of the employee's remuneration and how it is calculated;

- Each month, employer must deliver to his employees a pay-slip with the details of the remuneration;

- Work regulations: these regulations are a set of rules governing the general conditions of employment within the company and must contain certain information required by law, including, principally, the working hours, details of how wages and salaries are calculated and paid, certain health and safety information, etc.

According to the law of 5 March 2002 (transposition of the European directive 96/71/EG, concerning the posting of workers in the framework of the provision of services), the foreign employer does not have to comply with the Belgian rules on work documents if the occupation of the workers is temporary (less than 6 months), and that equivalent documents exist.

IV. EXAMPLE OF TAX ISSUES

The law

According to article 15 of the agreement between the Republic of India and the Kingdom of Belgium for the avoiding of double taxation, the remuneration derived by an Indian resident in respect of an employment exercised in Belgium shall normally be taxed in Belgium.

Notwithstanding the provision above, the remuneration derived by a resident of India in respect of employment exercised in Belgium shall be taxable only in India if the three following conditions are met:

a) the recipient is present in Belgium for a period or periods not exceeding in the aggregate 183 days in the relevant "previous year" or "taxable period", as the case may be;

b) the remuneration is paid by, or on behalf of, an employer who is not a resident of Belgium;

c) the remuneration is not deductible in computing the profits or income of a permanent establishment or a fixed base which the employer has in Belgium.

The taxable period of point a) has to be interpreted under the law of the country where the employment is exercised, i.e. Belgium. In Belgium, the taxable period runs from 1 January to 31 December.

In other words, the employees should be present in Belgium for less than 183 days per calendar year.

Example

An employee present in Belgium from 1 July 2003 until 15 December 2003, and from 10 January 2003 until 31 May 2003, will normally be taxable in India for his remuneration.

How should the aggregate 183 days be calculated?

Please find hereunder for your information some examples of periods to take into account:

- working days in Belgium: Yes
- Saturdays and Sundays in Belgium: Yes
- holidays spent in Belgium before starting to work: Yes
- holidays spent in Belgium during the working period: Yes
- holidays spent in Belgium after the working period: Yes
- day of arrival: Yes
- day of departure: Yes
- training in Belgium: Yes
- sickness leave: Yes
- working days outside Belgium: No
- holidays spent outside Belgium: No

APPENDIX: CHECK LIST

These are the different steps which need to be taken in order to employ non-nationals in Belgium:

- Work permit

To employ a non-national in Belgium, an employer must first obtain permission from the competent immigration authority. In addition, to work in Belgium, non-Belgian nationals must be in possession of a work permit.

The following documents are required for each worker :

- A copy of all the pages of the passport;

- A medical certificate stipulating that there are no indications that the health of the employee will disable him/her in the near future. The medical certificate may not be issued more than three months before introduction of the application of the permission. It must be drawn up by a doctor appointed by the Belgian Embassy or foreign Consulate and it is required to be stamped by the Belgian Embassy or Consulate.

- An original copy of the employment agreement dated and signed by the employer. We will make a draft using our standard employment agreement.

The annual salary must be at least 31.073 €.

The contract must provide:

1. The benefits in addition to the salary (car, location,...) and the employee's job description;
2. The place of execution of the work;
3. That the social charges will be paid in Belgium, if applicable.

- A copy of the study certificates;

- Four passport-size photos;

- Detailed information about the worker, his wife/husband and children (date of birth, date of marriage, nationality, place of living, ...)

- Application for a valid stay in Belgium

When the worker gets his/her work permit he/she has to submit an application to the Belgian Embassy or Consulate to obtain the visa in order to stay in Belgium.