Brexit: what’s its impact on immigration and tax matters?

After the UK withdrawal with a Brexit deal, there will not be any substantial changes until the end of the transition period, i.e. until 31 December 2020.

With regard to residence, the situation is as follows:

  • UK citizens and their family members, who already held a right to reside in Belgium by 31 January 2020, maintain this right after 31 January 2020. Residence documents type E(+) and F(+) expiring between 31 January 2020 and 31 December 2020 are extended until 31 December 2020;
  • UK citizens and their family members, who do not yet have a Belgian residence permit, should have obtained, or at least apply for, a residence permit prior to 31 December 2020: these applications are processed under the pre-Brexit rules, and will result in issuing a residence document type E (UK citizens) or F (third country family members);
  • All UK citizens and their family members lawfully residing in Belgium by 31 December 2020 are considered beneficiaries of the withdrawal agreement, who will receive a new residence document mentioning the withdrawal. The beneficiaries of the withdrawal agreement will be notified by the municipality by a letter: they do not need to contact the authorities. The anticipated planning is that all beneficiaries of the withdrawal agreement should have received their new residence card by mid-2021 at the latest. After 5 years of lawful residence (time before and after the transition period is taken into account) in Belgium, beneficiaries of the withdrawal agreement can apply for permanent residence, which can be lost after an uninterrupted absence of 5 years from Belgium;
  • Applications for residence permits filed after 31 December 2020 will be processed according to the rules for third country nationals, unless these applications are filed by some family members of UK citizens, who are eligible to reside under the abovementioned rules (they hold a right to reside on 31 January 2020 or they have filed a residence permit application before 31 December 2020).

Speaking about mobile employees, there are a number of other considerations for employers to take into account, such as identifying which employees to move, the cost implications, the need to revise employment agreements and policies regarding international mobility, remuneration, supplementary pension… We expect an increase of short-term business travels between the UK and EU locations in the future. These circumstances need to be managed as well. Before moving employees into a particular location, the employees will be concerned about how their net pay position or their pension entitlement will be impacted. In addition, there may be some favourable tax regimes in certain location, such as the Belgian special tax status for foreign executives. A careful consideration needs to be given on these elements as well.