HR Services - IAS - salary split memorandum

HR Services offering

International assignment solutions

Belgian tax information

Tax Tools (en - fr - nl)

	home > ias > tax information > salary split > tax aspects	print page

	International Assignment Solutions

The salary split theory for Belgian residents
Tax aspects : salary split for employees

previous page - next page

Principle

On the basis of the tax treaties Belgium has concluded, income from dependent professional activities is in principle taxable in the state where the activities are actually performed, i.e. in the working state.

Exceptions

As an exception to the principle of taxation in the working state, remuneration derived by a Belgian resident in respect of employment exercised in another state will be taxable in Belgium if the following three conditions are simultaneously fulfilled:

1	the recipient exercises his professional activities in the other state for a period not exceeding 183 days in a calendar year (or tax year), and

2	the remuneration is paid by, or on behalf of, an employer who is not a resident of the other state, and

3	the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other state.

The above regulation is usually referred to as the "183 days rule".

In practice, a split employment applies if one of these conditions is not fulfilled. If the employee is not present in the other state for more than 183 days, a split can be implemented by having his remuneration for foreign activities paid by the foreign company. From a corporate point of view, it is indeed the company which benefits from the activities which should bear the corresponding salary cost. In this respect we recommend that remuneration for foreign activities is processed through the payroll of the foreign company or branch and that an employment agreement is concluded between the employee and all employing companies involved.

Please note that the tax authorities may challenge a split employment scheme, and may request to be provided with documents demonstrating that the split employment corresponds with reality, such as time sheets or any other proof available.