Personal income tax
A first important lesson for a self-employed person? The income that you earn does not belong to you: several parties take a slice of that cake. In addition to social security contributions, you are liable for personal income tax. This overview clearly explains how it is calculated.
What is personal income tax?
Personal income tax is a tax that you pay on your taxable income. Every taxpayer in Belgium – anyone who lives or manages his or her assets here – must pay this tax.
What is the base for personal income tax?
Taxes are paid on the net professional income or net income, which corresponds to your annual turnover minus your work-related expenses (such as social contributions, pension savings or provincial taxes).
Personal income tax is calculated on all taxable professional income, even if some income was received or obtained abroad.
Your yearly income is always taxed the following year: in 2021 you will pay tax on your income in 2020.
How much tax do you pay?
Personal income tax is calculated on the basis of the system of progressive tax rates per bracket. This means that the tax rate rises as income grows.
Your net income is taxed according to a sliding scale based on four tax bands. The more you earn, the more you pay in terms of percentage.
Every taxpayer is entitled to a tax allowance: a basic amount that remains tax-free. This amount must be posted in the lowest taxation bracket. For the 2023 tax year, this amounts to 10.570 € (tax year 2025, income 2024. Depending on your situation – if you have dependent children for instance – the tax allowance may be higher.
|
Income bracket Tax year 2025, income 2024 |
||
| Bracket 1 |
25 % |
From 0,01 € to 15.820 € |
| Bracket 2 |
40 % |
From 15.820€ to 27.920 € |
| Bracket 3 |
45 % |
From 27.920 € to 48.320 € |
| Bracket 4 |
50 % |
More than 48.320 € |
To this personal income tax is added the municipal tax (also called "communal additions"). This tax is calculated by applying a percentage (usually 7%) to the amount payable for personal income tax. This tax is collected at the same time as the personal income tax.
Personal income tax can be reduced :
- for certain income (e.g. for foreign income, pensions and replacement income, etc.).
- for certain expenses (e.g. for childcare, pension savings, etc.).
Certain income is not taxed at these progressive rates and is taxed at separate rates (for example, the capital of your supplementary pension (under conditions)).
You will find all the detailed information about tax advantages, tax reductions, etc. on the website of the FPS Finance.
Leave the expert work to the experts
You can obtain an estimate of your tax by using Tax-Calc, an online application developed by the FPS Finance (only available in French or Dutch however).
Specific rules and exceptions apply to each sector and situation. For example, an assisting spouse or a fiscal year with a loss have a major impact on your personal income tax. You should therefore play it safe and consult your accountant to fill in the tax return.
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