Which country should I pay taxes to - Belgium vs USA dual citizenship tax question

Hey everyone, I'm in a bit of a tax mess that's doing my head in. I'm a dual citizen (Belgian and American) and I've been living in Belgium full-time for a while now. I work as a freelancer and my only client is based in the US. I've been trying to figure out this whole tax situation between Belgium and the USA since I know there's some kind of double-tax treaty between them to prevent paying taxes twice on the same income. What I can't figure out is whether I should be paying my income taxes just to Belgium (where I live) or if the US has some kind of priority or claim on my taxes since the client is American? The whole international tax thing is seriously confusing me. If anyone has dealt with this Belgian-American tax situation before or knows a reasonably priced international tax expert who won't charge me an arm and a leg for advice, I'd really appreciate it! Thanks so much!

0 coins

20 comments

The Boss

•8M

The short answer is: you likely need to file tax returns in both countries, but you probably won't end up paying double taxes. As a US citizen, you unfortunately have worldwide tax filing obligations regardless of where you live. The US is one of the few countries that taxes based on citizenship rather than residency. So you'll need to file a US tax return reporting your worldwide income. Since you're living in Belgium full-time, you're also subject to Belgian tax laws as a resident there. Belgium taxes based on residency, so you'll need to file and pay taxes there too. The good news is the US-Belgium tax treaty has provisions to prevent double taxation. You can use the Foreign Earned Income Exclusion (FEIE) on your US return to exclude up to $120,000+ of foreign earned income. Alternatively, you can use the Foreign Tax Credit to get US tax credit for taxes paid to Belgium. Since Belgian tax rates are generally higher than US rates, you might end up owing little to no US tax after credits, but you still must file the returns.

0 coins

The Boss

•8M

The source of your income (your American client) doesn't change the application of the FEIE. What matters is where YOU are physically located while performing the work. Since you're physically in Belgium while doing your freelance work, it counts as foreign earned income, even if the client paying you is American. The key factor for the FEIE is that you must meet either the Physical Presence Test (in a foreign country for 330 days in a 12-month period) or the Bona Fide Residence Test (established residence in a foreign country for an entire tax year). From what you've described, you likely meet both tests.

0 coins

Victoria Charity

•8M

I was stuck in a similar situation last year with dual US-French citizenship. The paperwork was driving me crazy until I found this AI tool that actually made sense of all my international income stuff. It's called taxr.ai (https://taxr.ai) and it really helped me figure out exactly which forms I needed and how the tax treaty applied to my specific situation. The best part was I could just upload my documents from both countries and it analyzed everything to make sure I wasn't missing anything important. It even spotted a deduction I was eligible for through the treaty that my previous accountant missed completely! Saved me almost €2000.

0 coins

Victoria Charity

•8M

It definitely helped with the treaty aspects. The tool has specific knowledge about the US-Belgium tax treaty (and many others). It explained which specific articles of the treaty applied to my situation and guided me through form 8833 (Treaty-Based Return Position Disclosure) which I didn't even know I needed to file. Regular tax software often misses these nuances. As for comparing to an accountant, I found it much more cost-effective. I was quoted around €800 for international tax help before trying this. The big difference is that you still maintain control of the process while getting expert guidance, rather than just handing everything over and hoping they get it right. I actually learned a lot about how international taxation works, which has helped me make better financial decisions this year.

0 coins

Oscar Murphy

•8M

Just wanted to follow up about the taxr.ai suggestion. I decided to give it a try and honestly, I'm really glad I did. The specific Belgian-US tax treaty stuff was all right there, including how to handle foreign tax credits and which specific forms I needed. It walked me through reporting my Belgian residency on Form 8938 and helped me figure out my FBAR requirements too (didn't even know I needed that!). The coolest part was seeing how the analysis broke down exactly which parts of my income were taxable where. It saved me from accidentally double-reporting some income that was exempt under Article 15 of the treaty. I'm still going to have my final returns reviewed by an accountant, but I'm bringing in way more organized documents and specific questions now rather than just confusion!

0 coins

Nora Bennett

•8M

Hi there - I'm an American who's been living in Germany for 7 years dealing with similar issues. One thing that really helped me was calling the IRS directly with specific questions about my situation. I know trying to call them sounds like a nightmare (because it usually is), but I used a service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes instead of waiting for hours or days. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c I had specifics about the tax treaty that no online resource could answer clearly, and the agent I spoke with was actually really helpful with my international filing questions. They clarified exactly which forms I needed for treaty benefits and which exclusions applied to my situation.

0 coins

Nora Bennett

•8M

It works by basically doing the waiting for you. When you sign up, the system repeatedly calls the IRS using their automated system and the right sequence of menu options until it gets a place in line. Then once it's about to be connected, it calls your phone and connects you directly to the agent. So you're not waiting - the system is. It's definitely legit. I was skeptical too until I tried it. The IRS does answer their phones eventually, the problem is the ridiculous wait times that most people can't sit through. This just handles that part for you. I understand the skepticism completely! I felt the same way. The international tax line is especially notorious. What convinced me to try was seeing they don't charge if they don't get you through. I figured I had nothing to lose, and it actually worked within about 20 minutes. The agent I spoke with answered my specific question about treaty benefits that applied to my freelance income.

0 coins

Lauren Zeb

•8M

Ok I'm eating my words here. After my skeptical comment I decided to try the Claimyr thing just to prove it wouldn't work. Well...I got through to an IRS international tax specialist in 22 minutes. I've been trying for DAYS to reach someone. The agent confirmed that as a dual Belgian-American citizen living in Belgium, I need to file both returns, but they walked me through exactly how to claim treaty benefits using Form 8833 and how the Foreign Tax Credit would likely eliminate my US tax liability entirely given Belgium's higher tax rates. They also warned me about a common mistake people make with Form 2555 (Foreign Earned Income Exclusion) where they forget to account for self-employment tax, which isn't covered by the exclusion. Seriously helpful information I couldn't find clearly explained anywhere online.

0 coins

Daniel Washington

•8M

Yes, FBAR (now called FinCEN Form 114) must be filed every year if your foreign accounts exceed $10,000 at any point during the year. The combined total across all accounts is what matters, not each individual account. This is completely separate from your tax return and has to be filed electronically through the BSA filing system by April 15th each year. If you've been in Belgium for 3 years with accounts over $10k and never filed, you should look into the Streamlined Filing Compliance Procedures. This is an IRS program specifically designed to help people in your situation catch up on missed filings without facing severe penalties. You'll need to file the last 3 years of tax returns and 6 years of FBARs.

0 coins

AstroAce

•10d

Generally no, a single freelancer working from home wouldn't create a permanent establishment. PE typically requires a fixed place of business through which you actively carry on business activities for the US company, like having an office or warehouse. Working from your Belgian home as an independent contractor usually falls under Article 14 (Independent Personal Services) rather than Article 7. The key test is whether you have a "fixed base" that's regularly available to you for performing your services AND you're in Belgium for more than 183 days in a 12-month period. Since you're just freelancing remotely, you're probably fine, but if your arrangement becomes more formal (like if they set you up with a Belgian office or you start having employees), that could change things.

0 coins