Context

An expatriate who had worked in Belgium since 1 October 1989 resigned in 1992. During his assignment to Belgium, the special tax regime for foreign executives regulated by the practice note of 8 August 1983 applied to him. After he left his job he continued to live with his family in Belgium until he signed a new employment contract in 1993 with a firm belonging to an international group. In his new employment he also worked in Belgium and requested continued application of the special tax regime. The Belgian tax authorities refused and considered him a Belgian resident for tax purposes as of 1993 without application of the special tax regime.

Court decision

In a recent decision, Brussels Court of Appeal held that the special tax regime for foreign executives could continue to be applied after the switch of employer (Brussels, 10 October 2007).

The court found that the individual had continuously maintained strong links with his home country and thus never had the intention to settle in Belgium permanently. The taxpayer showed that he still owned real estate abroad and was affiliated to a foreign medical and group insurance scheme, and his children were at an international school in Belgium. The court ruling was also influenced by the fact that the taxpayer was recruited by a foreign employer that had only set up a Belgian agency after recruiting him.

Although this ruling is not the first on the application of the Belgian special tax regime, it is nonetheless remarkable. The decision turns on the specific facts and circumstances of the case. Although more or less in line with current official practice, caution is advocated in extending this ruling to similar cases.