In which country do you pay your taxes?
This is regulated in the double taxation agreement between Belgium and Germany.
You pay tax in Germany on the income you receive in Germany. There may be some exceptions in this respect. This is the case, for example, with “posting” or “home office”.
The tax treatment in Germany depends on your personal circumstances. Germany distinguishes between two different tax obligations – limited and unlimited tax liability. The tax class also plays an important role.
Tax allowance for Belgian municipal tax
Your German income is taxable in Germany, but you still have to pay municipal tax on your German income in Belgium. Germany grants you a tax credit of 8% for this special levy. This credit can already be offset against your income tax. The employer receives this information from the tax office of the place of business by applying for limited or unlimited tax liability there. If necessary, this can also be refunded by filing a tax return.
In which country do you have to file your tax return?
Persons living in Belgium must always file their tax return in Belgium. In this declaration, you must also declare your net income received in Germany, but point out that this income has already been taxed in Germany, i.e. exempted. This income will be taken into account when calculating the rate for any other income taxable in Belgium, the so-called progression proviso. Municipal tax is also levied on the German income.
Whether you have to file a tax return in Germany depends on whether you were subject to limited or unlimited tax liability. A cross-border worker is always liable to limited taxation in the first instance and only liable to unlimited taxation on application. As a rule, a person with limited tax liability is not obliged to file a tax return in Germany. He can do so, but it must of course, you should first check to see whether this is advantageous.
A person with unlimited tax liability must always file a tax return in Germany and also enclose an EU/EEA return from the country of residence.
Posting
If a Belgian employer posts you to Germany, you may be subject to different rules. For example, you may still be subject to the Belgian tax and social security system. In such a case, contact the nearest GrenzInfoPunkt for personal advice.
Gainful employment in several countries
If you work in several countries – for example, as a long-distance truck driver – you may be subject to different rules with regard to social security and taxes. In such cases, we always recommend that you contact the GWOTeam team or the GrenzInfoPunkt for personal advice.