Belgians are traditionally a bit shy when it comes to declaring income, and even more so when it comes to foreign income.
To this day, there are still a lot of Belgians who own a property in Spain, and still do not include it in their Belgian tax return.
You are of course obliged to declare your worldwide income in Belgium, and therefore also the income you receive from your Spanish real estate. In this column we go over the main points.
Is there information exchange between Belgium and Spain?
Since the European Savings Directive, the Belgian tax authorities know that you have a bank account in Spain. After all, Spain is obliged to automatically report this to the Belgian tax authorities. If you have a house in Spain, you probably also have a bank account in Spain, so there is already a suspicion for the Belgian tax authorities that you are a homeowner in Spain.
Recently, progress has also been made in the exchange of information about real estate. So it won’t be long before the Belgian tax authorities know which Belgians have real estate in Spain.
What do I have to declare in Belgium?
Pursuant to Article 5 of the 1992 Income Tax Code, a Belgian resident is subject to personal income tax on all income listed as taxable in this Code, even if some of it is earned or obtained abroad. This means that income of foreign origin must always be included in the Belgian tax return.
In Belgium you are obliged to declare the gross rental value for foreign homes.
What is the gross rental value?
If you rent out a Spanish property, your effective rent is the gross rental value. This is logical.
If you do not rent out your Spanish home, you must determine a fictitious gross rent. Literally: The rental value is the average annual gross rent that you could have received in the event of a rental during the taxable period, according to the customs of the country and the location of the goods.
What do you need to specify?
The Valor Catastral is used to calculate the gross rental value of your property in Spain. To convert this Valor Catastral to Belgian law, the rule of
2% if the Valor Catastral was NOT established or revised in any of ten previous tax periods
1.1% if the Valor Catastral was established or revised in one of ten previous tax periods
You may deduct the Impuesto sobre los Bienes Inmeubles (IBI) from this. The Impuesto sobre la Renta de No Residentes is not eligible to be deducted, as this tax is not in accordance with Belgian law.
info VIW (Flemings in the World)
* info FPS Finance | Taxation | Private individuals (amended article 10/06/2020)