I am an American citizen planning to move to Brussels to take a position as an self-employed professional card holder. I've done tax consultations with experts in Brussels and in the US, and would advise you to do the same, as the system is phenomenally complicated and you'll need advice for your own situation. But at a high level, what I have learned is:
- the most tax advantageous position in Brussels is to set yourself up as a corporation, of which you are the director
- you are required to pay yourself a salary as director of your company of around EUR 45k. The Belgian tax rate on this is high - I was told it would be around 46% for income tax and social security contribution
- the remainder of your corporate profits are taxed at a corporate rate (20% for the first EUR 100,000, then 29%). BUT, you can deduct all kinds of expenses as corporate expenses, which means you effectively pay those things pre-tax. This could include a portion of your rent and utilities if you ever work from home, your car if you use it for work, every meal you eat at work or with people from work. In practice, I understand that people really push this to the limit.
- you then pay the remaining profits out to yourself as a dividend, where you pay either a dividend tax of 30%, or if you can wait five years or are leaving Belgium and liquidate your company, a lower "liquidation reserve" tax of only 15%. If you have enough savings to float, the best option is to leave the money in your company for 5 years/until you liquidate, where it can be invested. And, remember, a portion of your expenses may be covered by the company directly and by your director salary.
Then, in the US, there is effectively a kind of tax parity, where you essentially only pay US tax if the tax you would have paid in the US is higher than what you paid in Belgium, which will absolutely never be the case. I've been told that I may need to apply for my company to be considered a disregarded entity in the US to avoid issues under the new tax law, but this is a bit up in the air.
After all this nonsense, we found that our effective tax rate in Brussels would only be a couple of percentage points higher than what we currently pay in the US as long as we can keep our money in the company until we leave Belgium. But it requires an absolutely absurd number of steps to get there, and we'll probably be spending 5k+/year on accountants in Belgium and the US to make it all work. As with all things Belgian, it is 50x more complicated than it has any need to be.
Hope this helps!
