es, you need to pay tax on your Airbnb rental income. You are liable to pay three taxes which are;
- Income Tax
- VAT
- Regional/Municipal Tax
Income Tax
Hosts are required to pay taxes separately on furnishings, apartments, and other services for those who offer services like breakfast, laundry, pet-sitting, babysitting, etc.; the computation of income tax on tourist accommodations in Belgium is complicated. Unlike other nations, where the host's whole rent is taxed at either a flat rate or a progressive rate for income tax purposes.
Typically, 40% of your rent is categorized as furniture rent, also known as "movable revenue," and the remaining 60% is apartment rent, often known as "immovable income."
Some tax deductions from the movable income are permitted, and the income is taxed at a flat rate of 30%. Your tax return's net amount is subject to a flat 30% rate of taxation. The progressive tax rates on immovable income range from 25% to 50%, but the taxable income is based on "cadastral income" (CI) rather than the actual rental revenue.
Just in case you're new to Belgium and unsure what cadastral income means, allow me to explain it plainly.
The land register calculates cadastral income as the theoretically annual income a property would generate if it were rented out. The 1975 rent is multiplied by the cadastral income calculation year's index rate serves as the starting point. Since 1991, an index is generated for each year. The cadastral revenue is reduced by expenses for upkeep and repairs, and the net cadastral income is then indexed and subject to a flat tax of 40% for properties that are rented as a whole.
If you rent out a section of your residence, the CI only needs to be taken into account in relation to that component of the real estate that is rented out. When a quarter of a property is rented out, for instance, the calculation is 25% of the property multiplied by the number of days the property was rented out during the year, in this particular instance, five days if you only rent out your home during the week. The number of weeks in a year is multiplied by the number of days the property is rented out each week, so 52 weeks multiplied by five days and divided by 365 days equals a year, which is then multiplied by the cadastral revenue to obtain the correct amount to declare.
For instance, If the Cadastral Income is 1,250.00 euros, it will be calculated in this manner to get the amount to declare.
= 1,250.00 * 25% * 52*5/365
= 1,250.00 * 0.25 * 0.71
= 225 euros
In this scenario, the tax office will index your 225 euros to 1.9084 euros for 2022, increase it by 40%, and tax you on the predicted amount for the entire year.
NOTE:
Your Airbnb income is categorized as "miscellaneous income" and taxed at a flat rate of 33%, if you only rent out your accommodation infrequently. You can also exclude your actual out-of-pocket costs such as utilities, repairs, maintenance, etc.) from your gross income, but you should always be able to prove these costs in the event of a tax audit.
VAT
Hosts that earn less than 25,000 euros per year and do not offer additional services such as breakfast, etc., are exempted from collecting VAT from their guests.
VAT may be due even if you earn less than the VAT threshold of 25,000 euros annually but offer additional services, you are considered a business, and you are required to charge your guests 6% VAT and deduct the VAT you pay for your rental in your VAT return.
In Belgium, the annual income determines how frequently a VAT return must be filed. If your annual turnover in Belgium exceeds 2,500,000 euros, you must submit VAT returns on a monthly basis. You can pick between monthly and quarterly VAT returns if your business has a lower annual revenue.
By the 20th of the month following the reporting period, the Belgian authorities must receive the VAT return and payment. The 20th of December of every year is also when a VAT advance payment must be made.
Visit the SPF website for further information.
Tourist tax
Tourist taxes must be collected from your visitors. In Belgium, municipalities and cities have the authority to set the tourist tax rate. If you would like to find out the applicable rate, please check with your local authorities. Alternatively, you can go ahead and subscribe to the lodge compliance premium package for your property to learn about all the requirements that are relevant to your property.
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