Salary withholding tax and salary slip obligations for remuneration granted by foreign related company

The law of 11 February 2019 on fiscal, anti-abuse, financial and various other provisions introduced, among others, a legal fiction in cases where an employee or a director of a Belgian entity receives remuneration (e.g. stock options and benefits in kind) from a foreign related entity. In such cases the Belgian entity must and is allowed to withhold salary withholding tax on the regular salary of the employee or director and must file the corresponding salary slips.

The Belgian entity must comply with this obligation as soon as the foreign remuneration is the result of or granted because of the professional activity of the employee or director for the benefit of the Belgian entity.

In circular letter 2019/C/100 of 2 October 2019 the tax administration confirms that the salary withholding tax obligation applies as of 1 March 2019 and that separate salary slips must be filed  covering the period of 1 January 2019 until 28 February 2019. The circular letter also confirm that non-residents (companies and legal entities) also must comply with this rule when the employee or director works for a Belgian establishment.

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