Do you work in France/have you worked in France? Learn about the impact of the new double taxation convention between Belgium and France!

Impact for salaried employees of a French company

If you are Belgian and work for a French employer or on French terrain, it is always important to look more closely at where your salary may be taxed.

The double taxation convention states that the salary received by a Belgian resident may be taxed in Belgium, unless the work is performed in France. For work performed in France, this part of the salary is taxable in France (this is called a ‘salary split’).

However, if a total of three criteria are met, the entire salary can still be taxed in Belgium. It is these criteria that have been adjusted, meaning that the new convention may change how salaried employees are taxed.

• Previously, the convention stated that an employee could not remain in France for more than 183 days during a calendar year. Under this formulation, an employee could be in France for more than 183 days across two calendar years, without their salary ever being taxable in France. Under the new convention, however, the 183 days are counted over a rolling 12-month period. In other words, Belgian employees can be taxed in France sooner (and vice versa).

• Previously, the convention stated that the payment for work done in France was only taxable in Belgium if the employer issuing payment was themselves domiciled in Belgium. But under the new convention, payment for the days worked in France will only be taxable in France if the employer is domiciled in France. In practice, this change will only affect you if you live in Belgium and work in France for an employer domiciled in a third country. 

Impact for executives of a French company

Under the new double taxation convention, payment received by a Belgian resident in their capacity as member of the board of directors for a French company must be taxed in France.

However, if the director receives payment for performing everyday activities whose nature is management-related, technical, commercial or financial, then this payment will be considered equivalently to the payment of a salaried employee. This means that since the company is domiciled in France, the payment will be taxed in France, in proportion to the number of days of physical presence in France.

Impact for artists and athletes

The new convention includes a brand-new article specifically for artists and athletes. The new article states that the income that an artist or athlete receives from their own activities in France are taxable in France, unless the personal income is less than 15,000 euros (gross) per year.

Government employees

Salaries for government employees are to be taxed in the country of the government paying the salary. However, if the income is paid to a resident who is a national of the other country, and the work is done in this country, then the salary can be taxed in the other country.

For example: if a resident of Belgium who is a Belgian (not French) national works for the French government, their salary can be taxed in Belgium.

Pensions

Pensions can be divided into three categories: employee pensions, pensions for freelancers and pensions for civil servants.

Nothing is changing for employee pensions: these will continue to be taxable in the state of residence.

Pensions for freelancers will also continue to be taxed in the state of residence. The state of origin must exempt this income, unless the pension is not effectively taxed in the state of residence.

Pensions for government employees: similar to the salary, these pensions are taxed in the country of the government issuing the pension, unless the recipient is a resident and national of the other country. 

Do you live in Belgium and work in France or for a French employer? Make sure you get in touch with our specialists to find out exactly how your own situation will change under the new double taxation convention.