UK Pension Transfers to Belgium | Tips for Working in Belgium
QROPS Belgium – Most expats working in Belgium do not follow the route of UK pension transfers to Belgium, as most QROPS in Belgium are corporate pension schemes. Instead, most British expats who move to Belgium decide instead to move their pensions to Hong Kong due to the strength of the HK-Belgium Double Taxation Agreement which gives taxation rights to Hong Kong. Under current law, in 2016, a Hong Kong pension is taxed in Hong Kong at zero rather than in Belgium.
British expats working in Belgium, Belgians who have worked in the UK and anyone who has built up a UK private pension scheme or final salary pensions scheme can move their UK pension to a QROPS in Hong Kong and avoid all taxes on their pension as long as they remain tax resident in Hong Kong. Even if you retire else offshore at a later date, you may still be able to avoid tax on your pension if you reside in one of the 27 countries in the world which give the taxation rights to Hong Kong (see bottom of the article).
10 Tips for Working in Belgium
- You can transfer your UK pension to Hong Kong and pay zero tax on your existing pensions under current rules 2016/17
- As an expatriate, there are all sorts of “special concessions” if you are employed there
- Transfer your monies to EUR to avoid the exchange rate affecting your income stream
- You can pay Belgian tax by post to your local tax office (the address will be on the top of your tax return) or online using a Belgian eID through the Belgian government’s tax portal Tax-on-web.
- EU and NATO are the major employers in Belgium – see more here
- Now that Brexit looks like happening and article 50 envoked, you will need expat health insurance
- Labour law obligations in Belgium
- Traffic is terrible in Belgium, but public transport is excellent
- Meet other British expats in Belgium
- Read blogs from British expats living in Belgium
QROPS List Belgium
- A.Schulman International Services bvba Pension Scheme | QROPS Belgium
- Astra-Zeneca pension scheme (reception structure of the AstraZeneca Pension
- Fund Belgium OFP) | QROPS Belgium
- Eurocontrol Pension Fund | QROPS Belgium
- Fulcra International Financial Planning 013-1670001-00 | QROPS Belgium
- Greenpeace European Unit 011-720 | QROPS Belgium
- Integrale 5152 | QROPS Belgium
- Pioneer Europe N.V. | QROPS Belgium
- S.W.I.F.T. scrl | QROPS Belgium
- Thalys International | QROPS Belgium
- Toyota Motor Europe N.V. | QROPS Belgium
QROPS Hong Kong for Tax Resident in Belgium
We suggest moving a UK pension to a QROPS in Hong Kong. A QROPS in Hong Kong avoids Belgium income taxes. A QROPS in Malta, however would attract Belgium income tax (see below).
Income Tax in Belgium is Xero on a Hong Kong QROPS
Belgium income tax is between 0% and 50%. You would pay this on a Malta QROPS, but not a HK QROPS
Income taxes in Belgium on individuals are set progressively up to 50% under a five-bracket progressive tax rate:
Personal Income Tax Rates in Belgium 2016/17
Income tax table for Belgium 2016
|Taxable income bracket||Total tax on income below bracket||Tax rate on income in bracket|
|From EUR||To EUR||EUR||Percent|
Income Tax in Belgium on a Hong Kong QROPS for a Resident in Belgium is zero, but for a Malta QROPS or Gibraltar QROPS, you would pay the tax above.
The Belgium-Hong Kong Double Taxation Agreement gives the taxation rights to Belgium, which means that tax is zero. There is no income tax, no capital gains tax, no dividends tax and no death tax on a Hong Kong QROPS for residents in Belgium.
The Hong Kong-Belgium Double Taxation Agreement
The HK-Belgium DTA
Article 17 of the Belgium-HK Double Taxation Agreement
Pensions and annuities
1. Subject to the provisions of paragraph 2 of Article 18, pensions and other similar remuneration paid to a resident in a Contracting Party in consideration of past employment, and annuities, may be taxed in the Contracting Party in which they arise. This provision shall also apply to pensions and other similar remuneration paid by a Contracting Party under social security laws in force in that Party or paid under a public scheme in force in that Party in order to supplement the benefits of such social security laws.
2. The term “annuity” means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money’s worth.
3. Any alimony or other maintenance payment paid by a resident in a Contracting Party to a
resident in the other Contracting Party shall be taxable only in the first-mentioned Party. To the
extent such payments are not allowed as a relief to the payer in the first-mentioned Party, they
shall be deemed to be taxed in that Party for the purposes of Article 22.
4. Pensions shall be deemed to arise in a Contracting Party if paid by or out of a pension
fund or other similar institution providing pension schemes in which individuals may participate in order to secure retirement benefits, where such pension fund or institution is recognised for tax purposes or regulated in accordance with the laws of that Party.
In other words, a HK QROPS attracts zero tax in Belgium. Instead that pension is taxed in Hong Kong. Currently, HK has a zero income tax rate.
QROPS Hong Kong Benefits for Residents in Belgium
- No income tax in Hong Kong
- No capital gains tax in Hong Kong
- No dividends tax in Hong Kong
- No death tax in Hong Kong
- No UK tax on death as long as QROPS member does become tax resident in the UK
- No UK income tax as long as QROPS member remains tax resident outside the UK
- No tax in Belgium as the taxation rights are given to Hong Kong under the Belgium-HK DTA
- So, no tax on your QROPS pension in the UK, HK or Belgium as long as you remain tax resident in Belgium
- Even if you leave Belgium to retire elsewhere, you have a choice of 27 countries where you would be no income tax or tax on death on your pension pot
- Choose GBP, EUR or USD as the base currency for your QROPS pension scheme
- Freedom of choice of investments from selected platforms
- Pension can be paid directly to your local bank in Belgium or into an offshore bank of your choice at retirement
- Retirement benefits can be taken from age 55; no maximum retirement age, so you could use a HK ROPS simply for inheritance tax planning
- Neither a spouse nor any tax authority can seize assets of the QROPS pension trust. Your pension pot is not available to any creditor, even in event of bankruptcy
- 25% tax-free lump sum available at 55; 75% of the pension amount transferred must provide an annual income for life
- After the transfer to a QROPS in Hong Kong, you can continue to make additional pension contributions (top ups) to your QROPS from anywhere worldwide
- Maximum amount allowed to be transferred to a QROPS in HK from a UK Pension scheme is 1,000,000 GBP for 2016/17
- Hong Kong has Double Taxation Agreements (DTAs) enforced with 32 countries. 27 of these countries assign Hong Kong the right to tax Hong Kong-sourced pension income; this means if you move to retire to another country, it may be tax advantageous and you pay no tax on income; at worst it is tax neutral and you just pay income tax in your country of residence at retirement
- Hong Kong is an OECD country which is white listed and has tight regulations administered by the MPFA in HK.
- The 27 countries listed below have agreed that they will not tax Hong Kong pension income paid to their residents:
Belgium, Belgium, Brunei, Canada, Czech, France, Guernsey, Hungary, Indonesia, Ireland, Jersey, Korea, Kuwait, Lichtenstein, Luxembourg, Malaysia, Malta, Mexico, Netherlands, Peoples Republic of China, Qatar, Republic of South Africa, Switzerland, Thailand, UAE and Vietnam.
Who is Eligible for a QROPS in Hong Kong?
- British expats in Belgium
- Belgiums holding a UK pension scheme (UK personal pension, SIPP, SSAS, final salary scheme, DB, DC scheme)
- Anyone holding a UK pension scheme, although UK state pensions cannot be transferred nor final salary pension schemes “in payment”
Read more information here on QROPS Belgium