Let’s look at the tax return itself now.
By default, you receive the tax return with a document préparatoire for partie 1 ; that covers most standard income. There is also a partie 2, that is for people who have other income, such as company directors, partners in a partnership, freelancers, or self-employed professionals. If you need Part 2, you may have to contact your tax office to receive it but you can also download it here. The codes must still be completed on the one tax return.
The document préparatoire guide is basically the old tax return form that has been used for decades and is being updated every year. It groups all sorts of income and deductions to make it easier and, if you need assistance, there is also a booklet (and one for partie 2) explaining what sort of income is declared where and what the conditions are for a tax deduction. Then it is just a question of copying codes and numbers.
Looking at the tax return
When you look at your tax return, you will see that it is split up in boxes depending on the topic.
In box I you declare your telephone number and your bank account if you expect a reimbursement. Box II is for your personal information, your marital status, and the dependents you want to claim.
You have finally made your choice between filing online and filing on paper, but still, not everything makes sense. Far from it. In this third part of our guide, we see when you file jointly or separately. And what is that about reporting bank accounts?
Filing jointly or separately?
In Belgium, spouses and legal cohabitants don’t get to choose whether they file jointly or separately. If you ‘only’ live together, you file separate returns. It is only if you register your partnership at the commune, or if you marry, that you file your tax return together, and then only for the income of the following year.
The income of your year in which you married or registered your partnership must still be filed on a separate tax return. If you married on 14 February 2015, the tax return you receive in May 2015 will be for your 2014 income and that must be filed separately. The tax return for your 2015 income must also be declared separately. It is only in 2016 that you will file jointly.
If you file your tax return online via tax-on-web, you can file until July 15, and your accountant or tax adviser can file until October 29.
Tax-on-web is not something you do lightly or in a hurry. You need an ID-reader, your electronic ID-card (the one with a chip), and the PIN code you received with your id card. If you lost your PIN-code, contact the commune. Setting up the software for the e-card reader is the most tricky bit.
The buzz word in Belgian politics these days is ‘tax shift’. Forget about reducing taxes or cutting expenditure, the tax burden is to be shifted. The question is how and where.
For many years, AmCham Belgium has been lobbying the government to reduce employment costs. As Eurostat’s figures show, Belgium has the highest labor cost within the eurozone, and within the EU, Belgium comes second after Denmark. That is not only the result of high salaries, but also of high social security and high taxes on these salaries.
For years, the European Commission and the OECD have been underlining that Belgium relies too heavily on taxes and social security contributions on labor with a negative effect on job creation. A wage handicap not only deters potential investors, it also discourages employers from creating or maintaining jobs. This government has understood that for a small country, competitiveness is essential to ensure exports, jobs and maintain social security with a balanced budget. It has put jobs and competitiveness at the top of its agenda. The ‘index jump’, skipping one automatic wage indexation, is a little step in the right direction, but it is far from enough.
Since today you can declare your overseas bank accounts online with the Central Point of Contact National Bank of Belgium.
Belgium has banking secrecy rules that prevented the tax administration from asking banks for information about Belgian taxpayers. In 2011, Parliament made it easier for the taxman to set these rules aside in certain situations (see below, What is left of the banking secrecy?)
However, it was not easy for the tax man to find out where the taxpayer had a bank account ; he had to go on a fishing trip around the banks. To make it easier for the taxman, a register of banks and bank accounts is set up with the National Bank.
Instead of giving the task of maintaining a register of all accounts held by Belgian taxpayers to the tax administration, it was decided to entrust this task to the National Bank of Belgium, which established a "central point of contact".