Belgian Income Tax: Rates, Deductions, and Exemptions

Types of Taxes in Belgium

 

Belgium has a complex tax system with high personal income tax, a corporate tax rate of 25 percent, and several other levies. In the 2024 International Tax Competitiveness Index, Belgium ranked 26th out of 38 OECD countries. An individual or a business that earns income in Belgium will need to understand the structure of the tax system. This guide will explain the main types of tax and the rates that apply to each of them.

Types of Taxes in Belgium

Belgium has a highly developed but complex tax system designed to fund public services and redistribute income. The system includes both federal and regional taxes and applies to individuals, businesses, and legal entities that earn income or hold assets in Belgium. Taxation is managed by the Federal Public Service (FPS) Finance, along with regional and municipal authorities.

The main types of tax in Belgium include:

• Corporate income tax on company profits
• Personal income tax with progressive rates based on income brackets
• Municipal taxes that add a surcharge to personal income tax
• Value Added Tax (VAT) on the sale of goods and services
• Excise duties on specific goods like tobacco, alcohol, and fuel
• Social security contributions for employees, employers, and the self-employed
• Environmental taxes to discourage pollution and promote sustain

Corporate Tax in Belgium

In Belgium, a company must file a corporate tax return if it is a resident, a foreign company with Belgian income or assets, or a non-profit conducting business. The filing must be done on the BIZTAX platform unless the company has an exemption. The return will include taxable profits, capital gains, and adjustments such as hidden reserves or excess depreciation. The standard tax rate is 25%, with a reduced 20% rate available for small companies. Deductions are allowed for innovation income, R&D, tax shelters, and e-invoicing costs. Penalties apply for late or incorrect filing.

Corporate Tax Rates

Tax Rate	Condition
25%	Standard rate on all taxable income
20%	On first €100,000 if company qualifies as a small company (CSA Art. 1:24) and pays at least €45,000 gross salary to one director

Personal Income Tax in Belgium

Belgium applies a progressive personal income tax on individuals, where tax rates increase with income. The income is divided into brackets, and each part is taxed at a different rate. A portion of income is exempt through a personal tax allowance (€10,570 in 2024), which may increase based on personal circumstances. Non-residents can also claim the full allowance if at least 75% of their income is taxable in Belgium. Additional deductions apply for employment expenses, pension savings, donations, and some foreign income.

Income Tax Rates for 2024 

Tax Rate	Taxable Income Range (EUR)
25%	0 – 15,820
40%	15,820 – 27,920
45%	27,920 – 48,320
50%	Over 48,320

For more details on personal income tax in Belgium, you can refer to FPS Finance.

Municipal Tax in Belgium

In Belgium, a municipal tax is charged in addition to personal income tax. This tax is collected by the municipality to fund local services such as public infrastructure, waste management, cultural programs, and safety. It helps each municipality raise revenue to meet the needs of its residents.

The municipal tax is calculated as a percentage of the personal income tax amount owed. It is applied automatically and appears on the final income tax assessment—there is no separate invoice. All residents liable for personal income tax are also liable for municipal tax.

Each municipality sets its own rate annually. The average ranges from 5% to 9%, depending on the region.

Sample Municipal Tax Rates (Assessment Year 2025)

 

Municipality	Rate (%)
Brussels	6.0
Antwerp	7.0
Ghent	6.5
Leuven	6.7
Charleroi	8.5

Full list of municipal tax rates is available in the official document.

Value Added Tax (VAT) in Belgium

 

Value Added Tax is a tax on the sale of goods and services in Belgium. It applies at each stage of the supply chain. A business charges output VAT on sales and pays input VAT on purchases. The final cost falls on the consumer, but the business pays only the difference between the VAT it collected and the VAT it paid. Belgium applies three standard VAT rates, which are 6 percent, 12 percent, and 21 percent, depending on the type of goods or services.

VAT Rates in Belgium

 

VAT Rate	Type of Goods or Services
21%	Standard rate for most goods and services
12%	Intermediate rate for items such as social housing or restaurant services
6%	Reduced rate for essential items like food, books, or medicine
0%	Zero rate for exceptional cases such as exports

For more details on VAT in Belgium, you can refer to the FPS VAT guide 

Excise Duties in Belgium

Excise duties are indirect taxes applied to specific products such as alcohol, energy products, and tobacco. These taxes are regulated at both national and EU levels and are collected to control consumption and generate revenue.

Excise Duty Rates (from 1 January 2024)

Product	Excise Duty Type	Rate
Cigars	Based on retail price	5% + 6.5%
Cigarettes	Mixed (price + quantity)	34.04% of price + €6.89 + €171.11 per 1,000 pcs
Smoking Tobacco	Mixed (price + weight)	31.5% of price + €136.00 per kg
E-liquids	Fixed per volume	€0.15 per ml

Minimum Excise Amounts

Product	Minimum Duty
Cigars	€0.1226 per cigar
Cigarettes	€326.50 per 1,000 pieces
Smoking Tobacco	€228.10 per kilogram

For more details on excise duties in Belgium, you can refer to the official documents

Social Security Contributions in Belgium

Social security contributions are mandatory and help fund essential public services such as healthcare, pensions, and unemployment benefits. Both employees and employers contribute to the system, which is managed by the National Social Security Office (ONSS).

• Employees contribute around 13.07 percent of their gross salary.
• Employers contribute between 25 percent and 30 percent, based on the sector and size of the company.
• Contributions are deducted directly from the salary at the source.

The social security system will provide coverage in the following areas:

• Health and disability insurance
• Retirement and survivor pensions
• Unemployment benefits
• Insurance for work accidents and occupational diseases
• Family allowances
• Maternity and paternity leave
• Career break or time credit

Self-employed workers must also contribute through a social insurance fund. The standard rate is around 20.5 percent of annual net income, paid in quarterly advance payments.

For more details on social security contributions in Belgium, you can refer to the official documents or visit www.socialsecurity.be.

Environmental Taxes in Belgium

Environmental taxes are charges on activities that will cause harm to the environment. In Belgium, the government will apply these taxes on the use of a landfill, an incinerator, non-reusable packaging, short-distance air travel, and the discharge of polluted water. The aim of the tax is to reduce the level of pollution, support a circular economy, and promote the use of environmentally friendly practices by increasing the cost of harmful disposal methods.

Examples of environmental taxes in Belgium:

• Landfill tax – €107.87 per tonne in Flanders
• Landfill tax – €119.59 per tonne in Wallonia
• Incineration tax – €13.38 per tonne in Flanders
• Incineration tax – €14.69 to €68.33 per tonne in Wallonia
• Incineration tax – €15 per tonne in Brussels-Capital Region
• Aviation tax – €10 per passenger on short flights (≤500 km) in Federal scope
• Water pollution tax – €0.0125 per m³ in Wallonia
• Packaging tax – €9.86 per hectoliter on non-reusable packaging in Federal scope

Property Tax in Belgium

• Property tax is a regional tax that a property owner must pay every year on real estate located in Belgium. The amount of tax is calculated on the basis of the cadastral income, which is an estimated rental value assigned by the tax authority.
• You will be liable to pay property tax if, on 1 January of the financial year, you hold a real right to the property, such as ownership or usufruct. This means that you cannot transfer this tax obligation to a tenant, even if the property is rented.
• If you have a new home constructed, the property tax will start from the year after the building is put into use. In some cases, a reduction in property tax may apply, such as for certain family situations or energy-efficient buildings, depending on regional regulations.

For more details on property tax in Belgium, you can refer to the official guidelines.