Context

As you know, foreign executives who benefit from the Belgian special tax regime are considered as non-resident for Belgian income tax purposes. One of the criteria in order to qualify for the special tax regime is to prove that the expatriate’s centre of economic and personal interests is not in Belgium.

For Inheritance tax purposes it is also important to determine whether the deceased was a Belgian resident at the time of his death. The Belgian Inheritance Tax Code provides indeed that inheritance tax is due on the entire inheritance of a Belgian resident. In the case of a non-resident, a so- called “Tax on Transfer by Decease” is due on the real estate of the deceased located in Belgium.

A member of parliament recently asked the Belgian Minister of Finance whether the fact that the individual benefited from the special tax regime was a sufficient criterion, as such, to be considered as non-resident for inheritance tax purposes.

News

The Belgian Minister of finance said that the determination of “domicile” for inheritance tax purposes is a matter of facts, irrespective of the income tax situation of the deceased. In this case, the “domicile” is the place where the deceased had his effective residence, where he lived together with his family. The fact that the special tax regime for foreign executives applied to the deceased is an element that has to be taken into account but may not be considered, as such, as a deciding criterion.