Solution for frontier workers’ tax disadvantage

Families in which one parent works abroad will from now on automatically benefit from the most advantageous tax deduction for dependent children. With this measure, Minister of Finance Johan van Overtveldt is eliminating years of inequality for frontier workers. “If it is more beneficial, we will increase the tax-free amount for the partner with the lowest income instead of the partner with the highest income,” the Minister says. “From now on, it will no longer make any difference if you are married or cohabiting.”

The most beneficial calculation automatically

The tax deduction for dependent children is in principle allocated to the partner with the highest income. However, if he or she works across the border, that provides no tax advantage since this foreign income isn’t taxed in Belgium either way. For de facto cohabitants, this was not a problem because they can decide for themselves which one of the two partners assumes responsibility of the children for tax purposes. However, married persons and legally-recognised cohabitants didn’t have a choice in the matter.

“That inequality is being done away with now,” says Johan Van Overtveldt. “The FPS Finance itself will perform calculations for every family in this situation to see which partner is better off assuming responsibility of the children for tax purposes. As a result, frontier workers will automatically benefit from the most advantageous calculation.”