In accordance with the law of July 20, 2005 (replacing the previous law from 1999) employers of certain categories of seafarers that are employed aboard a vessel that is registered in the European Economic Area are exempt from the payment to the government of withholding tax that is withheld on the remuneration when certain conditions are met. The seafarer can nevertheless claim the withholding tax as a credit to his final tax liability on his Belgian income tax return.
In short, the employer should be active in the merchant shipping, dredging or towing sector. The employee should be considered a so-called communautair seafarer. Meaning that they have to be:
- Citizens of the European Economic Area when it concerns seafarers employed aboard ships
- In all other cases: seafarers that are subject to tax and/or social security of a member state of the European Economic Area.
An additional limitation is in place for the towing and dredging sector: the exemption is only applicable to the extent that the remuneration relates to the transport over sea with respect to the towing and dredging.
It is advisable to look at each specific case in more detail in order to ensure that the conditions and formalities are met to benefit from the exemption of withholding tax.