Belgian tax authorities lose 1 billion euros to popular loophole

Investigation reveals widespread abuse of tax break for cross-border workers

loophole has allowed thousands of foreign workers to avoid paying taxes on their Belgian income

The Flemish tax authorities are losing out on 1 billion euros a year due to a popular loophole that allows foreign workers to avoid paying taxes on their Belgian income.

An investigation by De Tijd newspaper found that thousands of foreign workers are taking advantage of a tax break that was originally intended to help them integrate into Belgian society.

The loophole allows foreign workers to claim a tax exemption on their first 80% of income, up to a maximum of €9,280 per year.

• This means that a foreign worker who earns €30,000 per year can avoid paying tax on €24,000 of their income.
• The loophole is particularly popular among workers from the Netherlands, France, and Germany, who make up the majority of cross-border workers in Belgium.

The Flemish government is now considering closing the loophole, which could save the tax authorities up to €1 billion per year.

However, the move is likely to be met with resistance from foreign workers, who argue that the tax break is essential to help them integrate into Belgian society.

The loophole has been in place since 1980 and was originally intended to help foreign workers integrate into Belgian society. However, it has since been abused by thousands of workers who are not genuinely living in Belgium.

The Flemish government is now considering closing the loophole, which could save the tax authorities up to €1 billion per year.

However, the move is likely to be met with resistance from foreign workers, who argue that the tax break is essential to help them integrate into Belgian society.

The loophole has been criticized by some as being unfair, as it allows foreign workers to avoid paying taxes on their Belgian income while still benefiting from Belgian public services.

• Others argue that the loophole is necessary to attract and retain skilled foreign workers.
• The Flemish government is now considering closing the loophole, but it is unclear whether it will be able to do so without facing legal challenges from foreign workers.