Belgium’s Prime Minister Alexander De Croo (Open VLD) is looking to reform the favourable tax regime for expats in an effort to balance the country’s budget, according to reporting from De Standaard.
Currently, foreigners living in Belgium while on a temporary work assignment (often called expats, which is short for expatriates) are only taxed on the days that they actually worked in Belgium.
They also enjoy a generous expense deductible, which is part of the reason why Belgium has become a tax haven for expats.
The Court of Audit has repeatedly criticised that regime, which benefits around 20,000 expats according to its latest report in 2015.
It doubted the legality of the circular on which the scheme is based and pointed out that the “temporary nature” of a work assignment is often very relative.
Some expats benefit from the system for a very long time, making them seemingly less of an actual expat and more of an immigrant whose primary residence is now Belgium, with no plans to return to their country of origin in the near future.
De Standaard reports that adjusting the current system could yield up to €35 million.
De Croo has been meeting with his deputy prime ministers since 9:00 AM on Monday about the budget ahead of Tuesday’s scheduled State of the Union Address.
In order to complete the budget, the government says it will need to find another few hundred million euros.