Working abroad as a self-employed person

Income tax

Before you start working abroad, you may be wondering whether you have to pay tax on the income you earn there. If you work abroad for a longer period of time, you may create a permanent establishment in that country. A permanent establishment is the permanent presence of a self-employed person in a jurisdiction other than Belgium. To determine whether a permanent establishment exists, the first step is to examine the double taxation treaty concluded between Belgium and the country of employment.

This treaty is the key instrument for determining whether a permanent establishment exists and determines the division of powers between the two countries. Having a permanent establishment in another country means being taxable in that country. Income attributable to the permanent establishment is taxed according to local tax rules and requires registration with the other country's tax authorities. As a self-employed person, you must comply with local compliance requirements, such as filing tax returns and complying with other local regulations.

Social security

In terms of social security, there are several implications to consider. Within Europe, special rules apply to self-employed people working across borders. The main rule is that you only have to pay social security contributions in one country, which should be the country where you work. If you work in several countries at the same time, you generally fall under the social security system of the country where you live. To work as a Belgian self-employed person in another country of the European Economic Area (EEA), you need an A1 certificate. This certificate proves to foreign authorities which country you're affiliated with regarding social security and where you pay social security contributions.

VAT

When working across borders, it is important to consider not only income tax but also VAT. It is essential that invoices are prepared correctly in accordance with the applicable VAT rules. Self-employed entrepreneurs need to ensure that their invoicing meets various requirements. VAT rules and rates can vary depending on several factors, such as the type of product or service, the recipient of the product and the location of the recipient. For example, if you sell a product to a company based in another EU country with a valid VAT number, you do not have to charge VAT. In this case, the reverse charge mechanism applies.