A great pity Seagull86 that the external links you posted were removed by Admin. I am sure they would have been helpful to those of us who cannot get to Belgium and would like to have an e-ID plus a one time code by email. As yet I have not found the appropriate email address to request an e-ID, although I have been obliged to send a copy of my passport and HMRC calculations for 2018-19 and 2019-2020, the result being that no Belgian tax will be taken until January of this year. It would be most helpful to be able to see MyMinfin and make tax declarations easier. I already take my photo with my passport open and a dated newspaper for the ONP to show that I am still alive. It is probably more secure than having their "Certificat de Vie" signed.
9th July 2021
I too have recently discovered the different opinions held within HMRC. My previous post was after a phone call to people close to the negotiating team. The indications were that things were moving on the Belgian side and that the Belgian pension should still be reported and taxed in the UK (for pre 2013 pensions).
Since then I have been informed of a different position expressed in the following letter written to our MP from HMRC.
“Thank you for your email of 16 June 2021 about your constituents Mr and Mrs X. I am replying on behalf of the Chief Executive.
I am sorry to hear about the difficulties Mr and Mrs X have had in trying to resolve this matter.
The taxation of pensions paid from Belgium to residents of the UK is governed by the Double Taxation Convention (DTC) between the UK and Belgium. Mr and Mrs X can find this online at: www.gov.uk/government/publications/belgium-tax-treaties.
The DTC has a provision on pensions that was renegotiated in 2012. Pensions are now only taxable in the country from which the payment is made – in this case, Belgium. Before, they were taxable only in the country in which the recipient was resident.
A separate provision applies this change only to pensions first paid on or after 1 January 2013. But the Belgian tax authority recently realised that this provision does not apply to state pensions, and that it had not been taxing some state pensions when it should have been. The Belgian tax authority is now writing to the affected parties to correct this error.
If Mr and Mrs X have been paying tax in the UK on a Belgian state pension, they will be able to make a claim for repayment. They can find guidance about this at: www.gov. uk/claim-tax-refund.
Mr and Mrs X should only record the Belgian state pension in the ‘any other information’ section of a UK tax return. They can find forms and guidance for Self Assessment returns, including the foreign income pages, at: www.gov.uk/government/ publications/self-assessment-tax-return-sa100.
I hope this helps you to reply to Mr and Mrs X.
There is a problem tying all this together in that the period Jan-March 2021 is covered by UK 2020-2021 tax return with tax paid by end of January 2022. The Belgian tax return for this same period will not be until autumn 2022 with a demand for payment in 2023. So, we shall not know what Belgium really demands until then as the tax currently being deducted is merely “provisional”. At that juncture, no doubt we shall discover which of HMRC’s theories is correct, whilst in the interim we pay to both countries. What a mess. I hope both countries will be lenient with the time cut off for reclaiming overpaid tax in whichever country that turns out to be.
Re Belgian State pensions dating from before 2013.
As I understand our situation, failure to complete a Belgian tax form could result in a fine. Furthermore, Belgium pays the pension and could deduct any outstanding fine or any tax due from that pension payment. If they do not have the relevant information (world-wide income, make up of household, spouse’s income), could they deduct tax at a default value equal to the top rate? What is the position?
It is essential for us to be aware of the precise consequences of failing to comply with the obligatory Belgian procedure simply because we have been informed by HMRC that we should pay tax on this income to the UK and not to Belgium. The minefield this creates for those of us caught in the middle, is an unnecessary worry.
I believe the tax currently being deducted by Belgium each month is only a provisional amount of tax, until they receive the necessary information requested on their tax return form. For the period Jan – March 2021, we shall not receive the corresponding Belgian tax form 2021 until 2022 followed by a demand for further payment (or perhaps a repayment) until sometime in 2023. Meanwhile we shall have already paid tax to the UK (2019-2020) on this Belgian Pension income by January 2022 at the latest.
Maître Quaghebeur, in his post ± one month ago gave a clear statement of the Belgian position. It is worth rereading his submission. He asked “What is the position of HMRC? Has there been a negotiation with the Belgian Tax Authorities? “.
We know the position of HMRC. Unfortunately, that involves us in potentially paying tax twice, plus the hassle of phoning and writing letters, perhaps being fined etc...
Regarding the negotiation, some of us have been told of a recent exchange with the British Tax Authorities: “Cependant, après un échange récent à ce sujet avec l’Administration fiscal britannique, l’adminstration fiscal belge a dû revoir sa position.” I can only assume that in fact they really have been in contact about this problem since they have stated that to so many of us.
It is now well over 2 months since I sent all the documentation to HMRC and I have heard nothing in response. It is unfortunate that the only signed letter telling me where to pay my tax on the Belgian State Pension (as from Jan 2021) has come from Belgium. HMRC has not written to me personally despite my writing to them. Had I not seen this forum, I would have assumed the system had simply changed after the “recent meeting” and therefore I would not have declared Jan-March 2021 Belgian Pension in the upcoming UK declaration. There must be some pensioners in this position.
We understand Covid has made life difficult for everyone, everywhere, but please HMRC you really do need to act.
27 04 2021
Whilst customers can’t elect in which country their pension is taxed, I don’t think the intention of the Tax Treaty was that it would be interpreted in different ways with the result that customers would be taxed in two countries on the same social security pension income.
Currently Belgium has the upper hand in that they pay the pension earned through employment in their country and as from January 2021 they have deducted some tax on those pensions which predate 2013. So, despite the opinion of HMRC, some of us, rightly or wrongly, are already paying tax to Belgium.
Those deductions at source during 2021 might not be sufficient to pay the amount of tax required for the Belgian fiscal year 2021 once the Belgian tax form has been correctly completed towards the end of 2022 with a reckoning sometime in 2023. Any tax due remaining unpaid could no doubt be withheld from future pension payments.
As previously, the Belgian pension for 2020-2021 should be declared to HMRC. However, the first 3 months of this year pose a problem. HMRC say we should report the gross amount as before. It is clear there is still no question in their minds as to where pre 2013 pensions should be taxed. We shall therefore pay tax again on the same amount (January to March) at the latest by the end of January 2022, long before we shall know precisely what our final tax bill will be to Belgium.
The result of both tax authorities believing that they are in the right is that we are in the position of paying tax twice, despite the aim of the Treaty being to avoid this.
I expect that both sides are familiar with Article 26: Exchange of information.
I would hope that they will also use Article 25: Mutual agreement procedure, particularly with the amount of evidence sent to HMRC, “the competent authority of the Contracting State” of which the concerned contributors to this forum are residents. What more must we do to further this procedure?
One major issue is that those receiving a pension pre 2013 are of a certain age and more; some are no doubt quite ill and unable to cope. The contributors on this forum are the able ones or able family members. Spare a thought for the others.
I look forward to having a response from HMRC, the 8 weeks wait for a response, as indicated on this forum, is almost at an end.
I agree about the ambiguity problem. In my post of 13 days ago, I tried to point this out using the letter I had received from Belgium. French, being more precise, used to be the diplomatic language. I also suspect that the interpretation unintentionally slipped through the net until Brexit which necessitated a review of all documentation. Taking 18a) and 18b) together, the intention of the wording becomes clearer. We are looking at section 18 simply from our view point.
The reply from HMRC Admin 19 was most welcome. I hope the situation will be clarified for all of us with Belgian State pensions predating 2013. The decision needs to be before we submit our 2020-2021 tax return.
The current situation is far from satisfactory for those of us caught in the middle. The decision regarding which country taxes us, is obviously not ours to take. Meanwhile the Belgian Tax authorities are already deducting tax from 01.01.2021, which may or may not be sufficient when it comes to the reckoning submission at the end of their tax year. Letters from both the Belgian tax and Belgian pension authorities have been forwarded, as requested, to HMRC at the given address. How long does it take to have a response? It would be reassuring to have at least an acknowledgement, with ideally an indication of whether the UK tax position as stated above still holds. If it does, and given that HMRC already have the necessary correspondence, I trust that they will contact the Belgians and as stated above "take this further with them if necessary". Otherwise for a good many of us, the prospect of being taxed twice looms ahead as both tax authorities appear to think they have the right to do so.
My letter from the Belgian Tax indicates that, "However, after a recent exchange on this subject with the British Tax authorities, the Belgian Tax authorities had to review their position." They then go on to explain the different treatment of state pensions and those under a pension scheme. It is all most unsettling.
Tired of waiting for a response, today I phoned "SPF Finances-Conventions internationales". I was informed a written response with documentation would be sent in the next 2 weeks. However, I was given the following information: The Protocol re 2013 date determining where pensions are taxed applies only to pensions of the "2e pilier". The state pension is considered to be a "legal pension ie 1er pilier" and as such is taxable in Belgium. Only now have the Belgians discovered that they were treating it incorrectly in the past. As yet I have not studied the full Treaty text in detail in both English and French. As the systems are different in so many ways, numerous headaches lie ahead. Please HMRC can you confirm this "new" interpretation of the Treaty and Protocol. Also given tax has been deducted in Belgium since 1st Jan 2021, is it still necessary to declare the gross Belgian pension income for the 3 months of 2021 in our 20-21 on-line tax declaration to HMRC.
I too have had a similar letter from the Belgian Pension Service in response to mine in which I pointed out the Treaty and Protocol indicate that Belgium should not be taxing my pension. Given the Pension Service has no authority over taxation I was advised in their letter to contact the Belgian Tax Authorities for whom they gave precise contact details. I have e-mailed them, asking for documentation regarding the "new interpretation". As yet they have not replied.
Interestingly forum "Belgian Tax Return", 2 months old, gives a different link in the response. It mentions the protocol of 2009.
The link given in response to my earlier question on this forum does not mention the protocol. Which is correct? More of a pressing issue is the fact that Belgium has already started deducting not only AMI and Solidarity (although expected their calculation overestimates my other pensions) but Tax too even though my pension should be covered by the protocol. If they continue to take tax, will I also have to pay tax to UK? Will I have to declare it on my Self Assessment if it has already been taxed?
Is this still the case for pensions which started to be paid in 2010 ie before the protocol signed 24/06/2009
and in force as from 24/12/2012, applying to Belgian state pensions paid from 01/01/2013 paid to UK. Exceptions were allowed when a Belgian pension was paid to a UK resident for the first time before 01/01/2013 (my situation), and all pension payments were made in full, being reported and tax paid in the UK. Is a new agreement in place after Brexit to cover the previous exception?
"toutefois, lorsque des pensions et autres rémunérations similaires payées en exécution d'un régime de retraite ont été payées ou attribuées pour la première fois avant le 1er janvier de l'année civile qui suit immédiatement celle de l'entrée en vigueur du premier Protocole à la présente Convention, tous les paiements effectués en exécution de ce régime ne sont imposables que dans l'autre Etat."