The authors of the Belgian coordination centre legislation realised that some expatriate personnel would probably be assigned to coordination centres in order to assure their proper functioning, particularly during the start-up phase. For this reason, the legislation provides to foreign executives and researchers an exemption from the normal requirement to obtain a work permit. Likewise, centres are exempted from the requirement to obtain authorisation to hire foreign nationals.
Non-Belgian executives, researchers and other specialists who meet the requirements for non-resident status under the Administrative Circular of August 8, 1983, are entitled to substantial concessions for personal income taxes.
These concessions consist principally in exclusion from the personal income tax of a variety of expatriate allowances representing the special costs of working and living temporarily in Belgium. Such non-taxable items include cost of living allowances, housing allowances, tuition and home leave grants as well as tax equalisation payments. Depending upon the job functions of the personnel member the maximum amount of such exclusions amounts to either to BEF 1.2 million (about 36,000 U.S dollars) or BEF 450,000 (about 13,600 U.S. dollars). This ceiling does not apply, however, to tuition allowances or nonrepetitive expenses such as relocation and settling in allowances.
Further concessions are available for coordination centre employees who qualify under the Circular and who travel abroad frequently on business. Under current rules income attributable to days spent working outside Belgium is not subject to Belgian income tax. Only income attributable to days spent working in Belgium is included in the taxable income.
The coordination centre legislation does not include any particular provisions regarding social security. Nevertheless, employees of coordination centres can benefit from existing provisions of EEC regulations as well as the U.S.-Belgian agreement on social security. Under provisions of the latter agreement, employees (irrespective of their nationality) sent by an American company to work temporarily at a Belgian coordination centre may be exempted from Belgian social security for up to five years, with a possibility of further extensions on a case-by-case basis. Such employees must, of course, remain covered under the U.S. social security system.
The content of this article is intended to provide general information on the subject matter. It is not a substitute for specialist advice.
De Bandt, van Hecke & Lagae - Brussels (32-2)501.94.75
Tax Law - Incentives For Coordination Centres In Belgium (Part 4: Concessions Fo
