Taxation in Belgium
Lua error in package.lua at line 80: module 'strict' not found. In Belgium, taxes are collected on both state and local level. The most important taxes are collected on federal level, these taxes include an income tax, social security, corporate taxes and value added tax. At the local level, property taxes as well as various fees are collected. Tax revenue stood at 48% GDP in 2012.[1]
Income tax is calculated by applying a progressive tax rate schedule to taxable income, with rates that go from 25% to a maximum rate 50%. The rates, as of 2014, are as follows:[2]
| Annual income | Tax rate |
|---|---|
| In between 0 € and 8680 € | 25% |
| In between €8680 and €12360 | 30% |
| In between €12360 € and €20600 | 40% |
| In between €20600 and €37750 | 45% |
| In excess of €37750 | 50% |
Furthermore, a long list of tax allowances can be deducted, including a general deduction and a deduction for every dependent. Tax deductions are granted according to the following table for 2014.[3]
- Basic personal allowance €7070
- Personal allowance 1 child €1500
- Personal allowance 2 children €3870
- Personal allowance 3 children €8670
- Personal allowance 4 children €14020
Employment income is also subject to social security contributions. Employee contributions are 13.07% and are deducted by the employer. In addition, the employer contributes about 35% of employees wage.[4] No ceiling for contributions apply on contributions for either employee and employer.[5]
Value-Added Tax (VAT) applies to most sales of goods and services. The standard rate of value-added tax is 21%.[6] A lower rate of 12% applies to social housing, meals and margarine. Another reduced rate of 6% applies to foods, drinks, hotels and medicine. Certain goods and services are exempted from VAT by law, this includes exports, and financial services. The Belgian VAT is part of the European Union value added tax system. Smaller businesses with a turnover lower than €25000 are exempt as of 01/01/2016.
Corporate tax applies at a standard rate of 33.99%.[7]
References
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