Tax emigration for an entrepreneur is not a matter of packing a suitcase and leaving. You need to carefully untangle your company, your place of residence and your tax obligations. This step-by-step plan outlines the order and the pitfalls.
Tax emigration starts with ending your tax residency in Belgium. That means not only deregistering your domicile, but also moving the centre of your vital interests. The tax authorities look at where your family lives, where your social contacts are and where you manage your assets. So choose a concrete departure date and make sure that from that date you demonstrably live abroad.
For entrepreneurs this is extra delicate: if your company remains in Belgium, the tax authorities may argue that you still work from Belgium. Document your stay abroad with rental contracts, energy bills and bank statements. A clear break prevents discussion about the tax year of departure.
Look at what should happen to your Belgian company. Does it continue to exist, do you move its registered office, or do you liquidate it? Each choice has different consequences for corporate tax, withholding tax on movable income and possible exit taxes. Check whether your activities can be carried out from abroad without your company retaining a permanent establishment in Belgium.
A common mistake is that entrepreneurs simply let their company continue to exist while they themselves work abroad. The Belgian tax authorities can then argue that the company is managed from Belgium, with all the tax consequences that entails. Make a clear plan for control, bank management and accounting. More about the specific challenges for entrepreneurs can be found on our page about tax emigration for entrepreneurs.
Belgium levies an exit tax on unrealised capital gains on shares and other assets upon emigration. This tax can be deferred if you move to an EU member state, but not always. Read the double taxation treaty with your destination country thoroughly: it determines which country may tax dividends, interest, royalties and capital gains.
For entrepreneurs with a company, the treaty provision on 'permanent establishment' is especially crucial. If your company remains in Belgium and you work from abroad, there may be discussion about where the profit is taxed. Have this investigated in advance by a specialist, because correcting it afterwards is expensive and time-consuming.
As an entrepreneur you do not automatically fall under the social security system of your new country of residence. Within the EU, Regulation 883/2004 applies: you remain subject to the system of the country where you work, not where you live. If you work from your new country of residence for your Belgian company, this may mean that you have to pay social contributions in that country.
Outside the EU, everything depends on bilateral agreements. Also do not cancel your private insurance too quickly: hospitalisation, guaranteed income and pension accrual must be reviewed. A gap in your social protection is easily created and difficult to repair.
In the year of departure you file a personal income tax return as a 'non-resident' for the part of the year that you still lived in Belgium. In addition, you must file a corporate income tax return if your company continues to exist. Do not forget VAT either: if your company continues to supply goods or services from Belgium, it remains liable for VAT.
Make sure you complete all ongoing tax obligations before you leave: advance payments, withholding tax on dividends and any overdue returns. A clean administrative start abroad prevents the Belgian tax authorities from coming with questions later.
Once abroad you must reorganise your business for tax purposes. That may mean setting up a local company, converting your Belgian company or working as a self-employed person in the new country. Take into account local corporate tax, social contributions and possible wealth tax.
Do not choose your destination solely on the basis of the tax rate. Look at the quality of the administration, the stability of the tax regime and the practical feasibility for your sector. A destination with a low rate but an unpredictable tax authority can cost you more than it yields. Compare destinations on our page about destinations for tax emigration.
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