On February 9, 2023, belgian newspapers reported that lawyer Hans Rieder is being accused by the Special Tax Inspectorate ("BBI") of domicile fraud and tax evasion. According to the BBI, he has been pretending to reside in Switzerland for years while he actually resides in Belgium. The crux of the discussion revolves around the question of which country one is a "tax resident" of.
If you are considering moving from Belgium to another country or vice versa, from abroad to Belgium, it's important to understand the concept of "Tax residency" and how it can affect your tax obligations.
The authority to levy taxes is dependent on possessing the status of a tax resident. A country of which a person is considered a tax resident, in principle, has the authority to tax the global income of that person.
In Belgium, tax residency is determined by two main criteria: place of residence and center of economic interests. In case there is a dispute regarding which country you are a tax resident of, it is usually possible to refer to a treatie for the avoidance of double taxation concluded between the concerned countries.
Most of these agreements use a cascading system of so-called "tie breaker" rules to determine tax residency when someone is considered a tax resident in two or more countries. These provisions first assess the location of a permanent home, followed by the center of main interests, habitual abode, and finally the nationality of the individual.
Each case of national residency is unique and has its legal nuances. Our team of experts can guide you through the complex world of tax law and double taxation agreements.
Christophe Romero
Senne Verholle
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