2018 Tax Return : Box IV – Earnings

Box IV is relevant for most people. It relates to remuneration paid to an employee (A), unemployment benefit (B), allowances paid during illness or invalidity (C) etc.

You have received a salary statement (281.10), or a statement confirming other benefits paid during 2017, and next to each figure, you will find a code that corresponds to the codes in the tax return. E.g. your salary statement shows code 250 to the left of your salary and 286 next to the tax withheld at source. The numbers must then be copied under codes 1250 and 1286 (for the husband) and 2250 and 2286 (for the wife).

If you have received a specific form of salary, e.g. an indemnity in lieu of notice (262 or 308), or stock options (249), these have different codes because they are taxed in a different way.

A “non-recurring profit based bonus” is tax exempt up to €2,830 if you complete the bonus under code 1418 and the exempt part under 1420.

An allowance for using public transport is tax exempt if you declare it in code 1255/2255 (A.9). An allowance for using your own car is tax exempt but only up to €390.

If you were working as a freelancer, if you were a self-employed professional or contractor or a company director, you will have to download part 2 (Dutch/French) of the draft tax return. The information you put there goes in the same pink tax return

Work outside Belgium

If you have received remuneration for work outside Belgium and if that income is taxable in the other country under the relevant article of the double tax treaty (usually article 14 or 15, see the list/map), you must still include that income in your tax return. You must mention that you claim the exemption at the end of box IV under letter . If you file on paper, you will have to copy that information in the corresponding box on p. 3 of the pink tax return.

It is advisable to attach a note to your tax return to explain for what reason the income is taxable in the country where you worked, e.g. mention the article of the double tax treaty.

See “Cross border taxation“.

Expenses

In Belgium you pay tax on net remuneration, after social security contributions and after expenses of employment.

You do not have to prove your expenses; you are entitled to an allowance calculated as a percentage of your earnings. If you earn more than €35,113, the maximum is €4,320. If you think you can prove higher expenses, you can do so but it will take a bit of work.

  • Only expenses that are necessary to carry out your job are allowable.
  • For the commute to and from work by car, you can deduct €0.15 per km (€0.23 if you cycle to work).
  • If you use your own laptop or table, or other office equipment, you can deduct part of these if you use them for work. Larger equipment and office furniture must be depreciated. This means that every year you deduct a percentage (e.g. 10% for furniture over ten years, 33.33% for a laptops over three years). And then you have to determine how much is work related.
  • Costs that aren’t exclusively professional (e.g. you use your laptop to check your private emails) are only partially allowable depending on the use (e.g. 80/20 for the use of your laptop). Only the part that relates to your job is allowable.
  • If you use a room at home as your office, you can deduct a percentage of the purchase cost of your house and the interest on the mortgage, of the electricity, etc. The percentage depends on the size of the room.
    If you are renting, check if the rental contract allows this, the landlady has probably forbidden this because she will pay more tax if you deduct part of the rent.
  • The cost of clothing isn’t allowable unless it is very specific for your job, like overalls or a lab coat. Suits and handbags aren’t allowable.

If you want to deduct expenses, detail them in a spreadsheet and the total goes in code 1258/2258. If you leave it blank, the taxman will deduct the allowance of 3,200.

If you deduct your expenses, you must assume that the tax man will ask you to prove them and will want to see the invoices and receipts. Try not to be too creative.

If your employer reimburses you for expenses you paid for him, that reimbursement isn’t taxable income, but these expenses aren’t allowable either.

Unemployed?

If you are unemployed, you can also deduct some expenses, but there is no allowance. Allowable expenses would be your union contribution, the cost of traveling for training, postage stamps for job applications, …

There is, however, no specific code for expenses; you deduct the expenses from your unemployment benefit and you declare the net income in code 1260/2260.

Depreciation is calculated on the acquisition or investment value of the depreciable components. It may also be used for second-hand goods. Even goods obtained free of charge, for example by donation, can be written off.

In that case, the depreciation base is the investment value or the contribution value. This is the price to be paid for the purchase of the goods in question: the actual sales value.

According to the ruling commission, internet auction sites can be used to determine that market value. As a depreciation base, you can therefore use the effectively paid price for the purchase of the second-hand office. If you got the desk, you can rely on the actual sales value.

 

Your Tax Return :

Author: Marc Quaghebeur

Marc Quaghebeur is a Belgian tax lawyer with Cabinet DAVID specialising in international tax issues and cross border estate planning. He is a member of the Brussels Bar and the Society of Trust and Estate Practitioners. He

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