7 tips for paying less tax
1. Set up a pension savings plan
Millions of people in Belgium are contributing to a tax-efficient pension savings plan. How much you stand to gain in 2023 depends on the maximum amount paid into the plan. The standard maximum amount for tax purposes is 990 euros, which means you could get tax relief of up to 30%. If you want to pay in a higher amount, you can opt specifically for 1,270 euros, which could earn you tax relief of up to 25%.
2. Reap the benefits of long-term saving
You can save with tax benefits under the long-term savings scheme (such as with a tax-efficient savings insurance product). The maximum amount for long-term savings depends on your personal situation.
In 2023, the absolute maximum amount for tax purposes is 2 350 euros and the tax relief potentially 30% of the amount you save. That means you could get a tax break of 705 euros.
3. Save for a home of your own
You can use the reserve that you build up in a guaranteed-interest life insurance (class 21) product (KBC Home & Long-Term Plan) to finance your loan balance insurance when you take out a home loan. You could get a potential tax benefit of 30% on the amount saved.
4. Make use of service vouchers
In Flanders, you can claim tax relief of 20% for service vouchers. That means a voucher worth 9 euros will cost you 7.20 euros, which saves you 1.80 euros. That figure for Brussels residents is less, amounting to 1.50 euros per voucher. In 2023, the general ceiling for service vouchers and neighbourhood work vouchers (Flanders)/Local Employment Agency vouchers (rest of Belgium) combined amounts to 1 520 euros per person.
5. Declare your childcare costs
For childcare in 2022 (assessment year 2023), you could declare up to 14 euros per care day per child under 14 (or under 21 if the child has a severe disability) in your tax return. This enables you to claim potential tax relief of 45% – or more if you’re a single parent on a low income.
6. Donate to charity
Donating to charity also brings you tax benefits. The government rewards your support in the form of potential tax relief of 45% if your donation meets the following conditions:
- The charity must be a recognised institution (see the FPS Finance website for more details)
- The donation must be at least 40 euros per institution (per year)
- You don’t give away any more than 10% of your net income
7. Support someone running a SME
In Flanders, when you lend money to a SME, or a friend or family member who is self-employed, you qualify for tax relief. That win-win loan generates a tax benefit of 2.5% per year. You can lend up to 75 000 euros, which would give you the maximum benefit of 1 875 euros a year.