Withholding tax exemptions in Flanders
Does your company employ people in Flanders, or are you planning to? Discover the exemption schemes available to reduce the tax rate of your employees’ taxable salaries, leading to significantly lower costs for you as an employer – without affecting your employees’ tax positions.
For scientific and R&D personnel
Your company can recover up to 80% of the withholding tax on professional income for academic staff and employees who:
- are engaged in R&D programs;
- possess a scientific master’s degree or a scientific bachelor’s degree.
For employees working in shifts or at night
Your firm is excused from paying part of the withholding tax that you must deduct from the gross salaries of employees who work in shifts or at night for at least 1/3 of their working time.
This exemption amounts to 22.8% of the total taxable wages, including shift premiums. For companies with continuous work regimes, this rate can be as high as 25%.
For employees in ‘support zones’
Companies that invest in specifically defined economic support zones may receive a withholding tax exemption of 25% on remunerations. The exemption is valid for two years per additional person employed by your company in the long run. It’s also applicable to personnel hired as the result of an acquisition.
Currently, companies located in the following zones are eligible for this exemption and can consequently save up to 4 to 5% on their total labor costs:
- the province of Limburg;
- the province of Flemish Brabant;
- virtually the entire province of Antwerp;
- the eastern part of the province of East Flanders.
Via the Geopunt Vlaanderen website (available in Dutch only), you can verify whether your company is located in a support zone. On the right side of the map, click the filter ‘Bouwen en wonen’ (‘Building and living’), then select ‘Bedrijven’ (‘Companies’) followed by ‘Steunzones’ (‘support zones’).
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Learn more about Flanders’ labor system: |