Withholding tax on non-resident seasonal workers in the agricultural or horticultural sector

The Law of 21 January 2022, containing various tax provisions, introduced the possibility of discharging the withholding tax due on salaries of non-resident seasonal workers in the agricultural or horticultural sector. To qualify for this scheme, certain formalities must be observed.

What rate of withholding tax is applicable to non-resident seasonal workers?

The remuneration of non-resident seasonal workers in the agricultural or horticultural sector are in principle subject to 18.725% withholding tax (without reduction).

This rate applies to:

•     the remuneration for work performed as a non-resident occasional worker in the agricultural or horticultural sector (workers referred to by article 8bis of the Royal Decree of 28 November 1969 implementing the Act of 27 June 1969 amending the Decree-Law of 28 December 1944 on social security for employed persons);

•     the end-of-year bonus and the loyalty bonus granted by the Guarantee and Social Fund for Horticulture to the non-resident seasonal worker referred to above;

•     the remuneration for work performed as a non-resident worker in the agricultural or horticultural sector with a fixed-term contract or a contract for clearly defined work of no more than 6 consecutive calendar weeks immediately following an employment as an occasional worker in the agricultural or horticultural sector with the same employer, as well as the holiday pay relating to that period .

Withholding tax in discharge?

Article 7 of the Act of 21 January 2022 containing various tax provisions has introduced the possibility to discharge the withholding tax payable on the remuneration of the seasonal non-resident worker in the agricultural and horticultural sector (income 2021) since the taxable period 2022.

Withholding tax is called "in discharge" when the beneficiary of the income subject to such withholding tax is no longer required to report it in his tax return. However, this is a possibility, not an obligation. This means that the worker who uses this option only bears the tax burden of the withholding tax as a tax and is exempt from filing subsequent returns. 

More specifically, with respect to the income of the seasonal worker in the agricultural and horticultural sector who is a resident of a member state of the European Economic Area, this is an optional system since he can also opt to regularize his income through a non-resident tax return.

However, the system of the withholding tax in discharge only applies if the taxpayer and, if applicable, his/her spouse, have not obtained or received in Belgium, during the taxable period concerned, any income other than that mentioned above which must be declared and regularized in the tax for non-residents.

Formalities for the employee

The seasonal worker who wishes to benefit from the system of the withholding tax in discharge must, in principle, provide their employer with a certificate of residence issued by the tax administration of their place of residence, at the latest on the day of the first payment of remuneration by that employer.

In view of the possible difficulties that the worker may encounter in obtaining a certificate of residence issued by his tax administration and delivering it to his employer within the statutory time limit, it is permitted that a certificate establishing his official residence may be issued by a public authority other than the tax administration, provided that such public authority is authorized to determine civil residence.

Such a certificate must be provided for any seasonal employment contract in the agricultural or horticultural sector and is mandatory as of the 2023 tax year (2022 income).

Formalities for the employer

The legal text obliges the employer to electronically provide a copy of the certificate of residence to the tax administration by 1 March of the year following the income year.

For pragmatic reasons and to ease the administrative formalities for the employer, the tax authorities accept that the employer keeps the certificates of residence at the disposal of the Belgian tax authorities and transmits them upon request.

Sheet 281.10 contains a new box that allows the employer to indicate that the remunerations regard a seasonal non-resident worker in the agricultural or horticultural sector subject to the withholding tax in discharge.

Sources: Royal Decree of 9 December 2021 amending the Royal Decree for the implementation of the 'Code des impôts sur les revenus 1992' with regard to the section of the withholding tax, Belgian Official Gazette 23 December 2021, Act of 21 January 2022 containing various tax provisions, Belgian Official Gazette of 28 January 2022.  Notice to employers paying remuneration to non-resident workers employed as seasonal workers in the agricultural and horticultural sector, Belgian Official Gazette of 9 March 2022