Specific rules exist in Belgium for the calculation of social security contributions for self-employed persons. One also have to bear in mind that the scope of application of the system differs from many other countries. In this respect one can note that, for example, directors of companies are usually also treated as self-employed persons for Belgian social security purposes.
When comparing the self-employed social security system with the system for employees, several difference can be noted, such as, for example:
Due to the fact that the contributions are calculated on the net taxable income of the self-employed person, and considering the standard statute of limitations for tax purposes of 3 years, the contributions were in the past calculated on the income of the person of the 3rd year preceding the year in which the contributions are to be paid.
This system resulted in some strange and sometimes quite unjust situations. One had, for example, the specific rules for the first 3 years of the professional activity (when there was not yet a valid reference year for the calculation of the contributions). For individuals with income that fluctuates much from year to year, the contributions could get much out of line with the actual income of any given year. Especially when annual income was decreasing from year to year, the self-employed professional was faced with high social security contributions, that still reflected his past income level.
In order to resolve such issues, the calculation method for the contributions was changed from the year 2015 onwards.
From this year onwards, the contributions are calculated in two phases. Since the actual income of the year cannot be known in advance, preliminary contributions are first to be paid during the year. These preliminary contributions are in general still calculated on the basis of the income of the 3rd preceding year, but they are not yet the final contributions due. For the income of 2015, the year 2012 is used as the reference year. The 2012 income is converted to current price and income levels by applying a revaluation coefficient (501,14 over 487,36).
In case one expects the income for the year to exceed the initial estimate (income of the reference year from the past), one may opt to immediately pay higher quarterly contributions. No special formalities must be met to increase the contributions.
If one expects the current year’s income to be lower than the initial estimate, it is possible to make a request for a reduction of the contributions. The reduction of the contributions is only accepted if certain conditions are met. A request form must be submitted with the social insurance fund and the reasons and evidence must be provided in order to justify why the income is likely to be lower in the current year as compared to the income of the 3rd preceding year.
After the end of the year and upon filing the annual tax return, the tax authorities will provide the social insurance authorities with the amount of the net taxable income of the self-employed person. Based on this information, the social insurance fund will calculate the final contributions that are due. If the contributions were underpaid, one has then to settle the balance and also pay an increase due to underpayment of the contributions.
The contribution rates and the annual ceiling of the contributions have not been changed as compared to prior years. There is a minimum quarterly contribution for 2015 (excluding the administration fee of the social security fund) of 707,87 EUR (when the self-employed activity is the main professional activity of the individual). The maximum quarterly contribution (excluding the administration fee) this year amounts to 3.988,67 EUR.
The minimum contributions are calculated on net taxable income of 12.870,43 EUR (even if actual income is lower than this amount). The contributions are calculated at a rate of 22% up on income up to the level of 55.576,94 EUR. Above that amount, the contribution rate drops to 14,16%. The ceiling for the calculation of the contributions has been set at 81.902,81 EUR. Above that income no further contributions are due.
If the self-employed activity is not the main professional activity of the individual, there is an income threshold of 1.423,90, below which no contributions are due (for a main professional activity, there is no such minimum income threshold).
Specific calculation rules are applied for the first 3 years of a professional activity.