{"id":2509,"date":"2023-04-24T11:37:48","date_gmt":"2023-04-24T10:37:48","guid":{"rendered":"https:\/\/unionsyndicale.eu\/agora_article\/le-statut-du-domicile-fiscal-et-lexception-de-residence\/"},"modified":"2023-07-24T14:21:49","modified_gmt":"2023-07-24T13:21:49","slug":"the-status-of-tax-domicile-and-the-residence-exception","status":"publish","type":"agora_article","link":"https:\/\/unionsyndicale.eu\/en\/agora_article\/the-status-of-tax-domicile-and-the-residence-exception\/","title":{"rendered":"The status of tax domicile and the residence exception"},"content":{"rendered":"
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The status of tax domicile and the residence exception<\/h1><\/div><\/div><\/div>
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The status of tax domicile and the residence exception<\/h1><\/div><\/div><\/div>
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Agora #88<\/span><\/div>
Pages 35 - 36<\/span><\/div><\/div>
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Although subject to a special tax regime, European officials are a taxpayer like any other. As a result, they remain subject to the applicable tax obligations in the State of their tax residence.<\/span><\/p><\/div><\/div><\/div>

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European officials failing to file a tax return are therefore in breach of duty and may face serious consequences. Therefore, it is important to be mindful of the applicable principles, including specific rules, which are not always easy to grasp.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/section>

Tax domicile status and \u2018Exception of residence\u2019<\/h4>\n<\/div><\/div>
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In principle, a European official is a tax resident of the country in which they have established their tax residence. In Belgium, the effective place of residence, which is characterized by a certain level of stability over time, is taken into account. Therefore, the tax residence is the place where the taxpayer has established their family and social life.<\/p>\n

However, European officials shall exceptionally maintain their tax residence in the country where they were established last at the date of their entry into service, provided that the following three conditions are cumulatively met:<\/p>\n

The official\u2019s initial residence was located in a Member State of the European Union.
\nThe official has established his or her new residence in the territory of another Member State.
\nFor the purpose of performing professional functions in service of the European Union.
\nThis exception, known as the \u2018residence exception\u2019, has certain effects: European officials living and working in certain Member States (mainly France, the Grand Duchy of Luxembourg and Belgium) are considered as tax residents of another Member State.<\/p>\n

This rule applies to European officials for as long as they are in service. Upon completion of said service, for instance through retirement, the residence exception no longer applies. European officials can then find their tax residence transferred overnight from one State to another without their living habits having changed.<\/p>\n<\/div><\/div><\/div><\/div><\/div>

Which obligations?<\/h4>\n<\/div><\/div>
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Income taxes<\/strong><\/p>\n

In their tax residence state, European officials must file a tax return. The content of the declaration may vary from one state to another, but the principle remains the same. Furthermore, it should be noted that in Belgium, if a European official is married to or legally cohabits with a person whose tax residence is established in Belgium, they ought to file a distinct tax return.<\/p>\n

Exceptionally, European official are not required to report the income deriving from their work for the Union, which is taxed by the Union. however, all other income will have to be reported, regardless of the source.<\/p>\n

The same principle applies to multiple other information which ought to be communicated to the tax authorities of the tax residence state, including foreign bank accounts which the European officials may hold.<\/p>\n

In Member States other than their tax residence state, European officials may also have further reporting obligations. As it is the case, for instance, in the event of owning real estate property located in that country.<\/p>\n

Inheritance tax<\/strong><\/p>\n

In the event of the death of a European official, their heirs are also bound by a series of obligations.<\/p>\n

It is therefore important to note that, if the death occurs while the European official is still in service, the residence exception shall apply.<\/p>\n

For example, the inheritance of a European official, whose tax residence is established in Spain, but who lives in Belgium, will therefore be subject to the Spanish tax, if he or she dies \u201cwhile in service\u201d. If he or she continues to live in Belgium after retirement and passes away, the inheritance will be subject to the Belgian tax.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/section>

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In conclusion<\/h4>\n<\/div><\/div>
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Although European officials are undoubtedly subject to several specific rules, these rules do not alter their status of taxpayers who, in one State or another, are required to file an annual tax return, providing a wide range of information.<\/p>\n

The fact of the matter is that because of the rules mentioned above and their lifestyle which is divided between the Member State where they work and their Member State of origin, European officials often find themselves in a complex situation, with far more tax obligations than an ordinary taxpayer.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/section>

<\/div>\"\"<\/div><\/div><\/div><\/div><\/div>

Ma\u00eetre Mika\u00ebl Gossiaux<\/h4>\n<\/div><\/div>
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About this Author<\/h6>\n<\/div><\/div>
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Ma\u00eetre Mika\u00ebl Gossiaux\u00a0has been a member of the Brussels Bar since 2004, and has been a partner since 2018 at Hirsch & Vanhaelst law office. Mika\u00ebl has a solid knowledge of corporate and personal taxation which leads him to intervene at the advisory stage as well as at the administrative or judicial litigation stage. He is an associate professor at the Centre for Private Law of the Universit\u00e9 Libre de Bruxelles (Tax Law Unit).<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/section>\n","protected":false},"featured_media":0,"menu_order":0,"template":"","meta":{"_acf_changed":false},"agora_edition":[79],"class_list":["post-2509","agora_article","type-agora_article","status-publish","hentry","agora_edition-agora-88-en"],"acf":[],"yoast_head":"\nThe status of tax domicile and the residence exception - Union Syndicale<\/title>\n<meta name=\"description\" content=\"Although subject to a special tax regime, European officials are a taxpayer like any other. 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