Start-up reduction on social security contributions for self-employed persons

The start-up reduction was part of the 'Summer agreement' and took effect on 1 April 2018. With this initiative, the government intends to reduce the financial burden of self-employed persons in start-ups, who often have low incomes at the start of their activity, thereby stimulating entrepreneurship. 

Which self-employed persons are eligible? 
The reduction measure applies to all self-employed persons in start-ups who are in their first to fourth quarter of activity on 1 April 2018, these being:

  • All persons self-employed as their main profession
  • All persons self-employed as their secondary profession who amend the link to main profession
  • All student-self-employed persons who amend the link to main profession

An additional condition is that the starter has not been self-employed as their main profession during the 20 quarters prior to the start-up reduction. 

What is the amount of the start-up reduction? 
Social security contributions are normally calculated on the basis of the annual taxable income. As a starter, you pay a minimum contribution of €715.64 per quarter for the first three years.This contribution is fixed at a flat rate, as the income of a starter is often difficult to determine. As soon as the social insurance fund receives the actual income via FPS Finance, the self-employed person receives a final settlement. In most cases, this final settlement will take place after around two years. The final statement is calculated on the actual income, with a minimum of €369.56 per quarter. If it appears that insufficient provisional contributions have been paid, additional payments must be made. If, on the other hand, too much has been paid in contributions, it will be reimbursed.As such, starters automatically benefit from the reduction if their income is low enough. 

A starting self-employed person who wishes to benefit immediately from the reduction measure can have the provisional quarterly contribution reduced to one of the following amounts:

  • €369.57 if the estimated net professional income does not exceed €997.55, or
  • €477.10 if the estimated net professional income is between €6,997.56 and €9,033.67.
  • If the estimated net professional income exceeds €9,033.67, there is no reduction and the starter generally pays the ordinary minimum contribution of €715.64.

Note that if in this first year the starter - unexpectedly - earns much more and applies for the start-up reduction without being eligible, then not only do they need to repay it, but the government will also charge a fine. 

How can you apply for the start-up reduction? 
The start-up reduction can be applied for in writing to the social security insurance fund, and must be justified.

Also the unequal treatment gets reviewed
Benefit in kind for housing: how to anticipate the higher or lower scenario?
Discrimination as regards the benefit in kind for housing has been highlighted on several occasions. Specifically, it relates to the unequal treatment of the same benefits, whether in terms of provision by a sole trader or provision by a legal person. In the most common cases, the benefit arising from being a limited company is almost four times more expensive taxation-wise than the benefit arisin
A full overview
Your mortgage in the personal income tax return assessment year 2018
The new tax return form for personal income for tax assessment year 2018 has recently been published, so it is high time to examine how you can correctly fill in your mortgage in your personal income tax return. The biggest change in 2017 occurred in the housing taxation system of the Brussels-Capital Region. The other regions have all maintained a status quo compared to last year. A full overview
The labyrinthine of the personal income tax return made more user-friendly
Personal income tax return: changes to the form for assessment year 2018
On 6 April 2018, the model for the personal income tax return form relating to assessment year 2018 was published.
we will analyse the guidelines related to this reform
After the new inheritance law comes the ‘drastic’ reduction in inheritance tax… or not yet?
Further to the inheritance tax reform and the changes planned in the matrimonial property law, the Flemish government has also announced a change to inheritance tax. The aim was not only to simplify, relax and reduce this grief-related tax, making it more in tune with the new inheritance law, but also to create more alignment with new family relationships. There was talk of a ‘drastic’ change
Revolutionary decree
Belgian Tax Administration rebuffed: exit “subject-to-tax clause”?
On 25 January 2018, the Court of Cassation reached a remarkable decision in the context of allocation of taxing rights for professional income earned within an international context. The dispute In concreto, the case pertained to professional income earned by a professional cyclist. During the period 2007-2009, said cyclist was engaged by a Belgian employer and participated in numerous races a
Modernisation of the VAT system
Europe announces biggest VAT reform: first amendments to take effect as from 1 January 2019
Based on the knowledge that the current VAT system is no longer adapted to the rapidly-evolving digital and mobile economy, the European Commission has been striving for years for profound modernisation of the VAT system. A thorough study and investigation into the way in which this should be done specifically resulted in a proposal from the Commission, in December 2016, giving priority to simplif
The consequences for companies
VAT on your own construction work: an explanation of the amended law
On 29 November 2017 amendments were made to several points in the VAT Code. This amended law was explained by the administration on 12 February (in the Circular 2018/C/20). In this article we aim to consider the consequences of the amended law for companies constructing their own company building or carrying out their own repair/maintenance or cleaning work. Former situation Whenever a VAT-reg
Breaking news
Possibility to subject leasing to VAT from 1 October 2018
Minister Van Overtveldt's Cabinet has announced that the VAT rules with regard to the leasing of immovable property will be changed from 1 October 2018. 
Setting up a plegde on moveable assets will be easier
The new Pledge Act: introduction of a non-possessory pledge and extension of the retention of title
The new property law came into force as from 1 January 2018 (the act of 25 December 2016 establishing the amendment of various provisions with regard to the collateral on moveable assets, Belgian Official Journal 30 December 2016). This makes it easier to set up a pledge on moveable assets thanks to the introduction of a Pledge Register and it extends the effect of retention of title. Non-posse
New fixed benefits in kind as from 2018
Split bill rule can avoid benefit in kind for smartphones
Whenever an employer provides an employee with a free tablet, mobile telephone, telephone or data subscription that may be used for private purposes, this is considered a taxable benefit in kind. Since the beginning of this year there are fixed charges for such benefits, but in some cases it is possible for a benefit to be avoided. Fixed benefits in kind as from 2018 A fixed amount has been

Subscribe to our newsletter