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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 involved in fundamental research, industrial research or experimental development;
  • are involved in partnerships with universities or university colleges;
  • possess a scientific master’s degree.

Note: some bachelor’s degrees – in fields such as biotechnics, healthcare, industrial science and technology, nautical science and product development – are also eligible.

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 ‘specific economic domains’

Companies may receive a withholding tax exemption of 25% in ‘specific economic domains’, in which Flanders’ government aims to boost employment rates. The exemption is valid for two years per additional person that your company employs in the long run. It’s also applicable to personnel hired as the result of an acquisition.

Currently, companies located in ‘support zones’ in and around Genk, Turnhout, Zaventem and Vilvoorde are eligible for this exemption and can thus save up to 4 to 5% on their labor costs.

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