Start your life as a self-employed with a head start!
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Here you are, you have just arrived in the country of beers & chocolates and want to kick off your self-employed activity. Or even better: you have been there for some time now and you want a change in your career: in both cases, you are about to enter a fully new experience!.
We know the feeling, we’ve been there ourselves.
In this article, we give you all the tips we wish we had known before starting as self-employed. We will help avoid all the pitfalls that you might cross in your new life!
It all starts by getting the self-employed license 📜
If you live in Flanders, since September 1st, 2018, you do not need to demonstrate basic management knowledge to start a business anymore.
However, whether you reside in Brussels or Wallonia you need to be able to demonstrate that you have enough basic knowledge on how to operate and run a business to become self-employed. Without this proof, you will not be able to register at the Crossroads Bank for Enterprises.
How can you demonstrate this knowledge?
You can also resort to your professional experience to prove your knowledge: several years of experience in the field you are applying for are typically needed (this last part only applies for Wallonia).
If none of these options works for you, you can always decide to go back to school and take an exam at the central examination board.
Next step? Open a professional bank account
We recommend you to open a separate bank account for your new business: by having a dedicated bank account, you can better keep track of your receivables. Most importantly, it gives you the option to differentiate your professional expenses from your day-to-day expenses. Tax authorities will love that for sure.
It is up to you to choose a bank. You may even be able to settle the matter in a few clicks from your comfortable couch…
Register at the Crossroads Bank for Enterprises
Registration at the Crossroads Bank for Enterprises is the core step of the process: it is your official relationship with the State as a self-employed worker.
Indeed, registering will give you the magical pass to your new life: a company number. This will appear on all of your invoices and official documents/.
The CBE register contains all the details of your company (name, address, etc.) as well as those of all self-employed in Belgium. Get ready to pay 89.50 euros for this part of the process.
Opt for a social security fund
As a self-employed, you also need to affiliate yourself with a social security fund. You can choose any of these social security funds (only available in Dutch).
Don’t be mistaken; it is a mandatory step: failing to do so early on as you start your activity will put you in deep trouble. The fund that you choose will take care of family allowances, child benefits, your pension as self-employed, and some safety net in case of e.g. bankruptcy.
How much you need to pay for this fund depends on your earnings. Social contributions amount to around 20% of your taxable income. Of course, as a starter, it is difficult to estimate how much you will earn: there is usually nothing to base your estimation on. You can choose between a fixed minimum amount (746.23 euros) or a higher amount of your choosing.
We recommend matching, as much as possible, your social contributions to 20% of your taxable income. If you wait to do so, tax authorities will come back at you years later & claim the difference.
Finally, don’t forget to let your health insurer know about your status change so that you can benefit from sickness and invalidity insurance.
💡TIP: You pay social contributions for the entire quarter, even if you’re only working for one week during that same quarter. Aspiring self-employed, choose your starting date carefully!
What about my VAT number?
As a self-employed, you might obtain a VAT number (same as your company number) and become subject to VAT. As soon as you have this VAT number, you can start invoicing and receiving money for the products & services you deliver.
VAT is relatively simple: it is a tax you collect from your customers and payback to the government, typically quarterly. You claim it back from deductible professional purchases
You start issuing VAT returns as soon as you start collecting it from your customers. Thankfully the government made an easy to use calendar so you know the exact deadlines.
Of course, on Accountable, you get timely reminders when needed.
If you want to get a VAT number for your business you can do so by filling in this form (only available in Dutch and French). You can also do it directly via Accountable: our partnership with Xerius conduct you through all this process, including receiving your VAT number, via your smartphone.
When your turnover is below 25.000 €, you can choose to be exempted from VAT. In that case, no need for you to send a VAT return quarterly. You only need to submit a listing of clients yearly, by March 31st. It naturally means that you cannot deduct the VAT from your expenses and that you do not pay back VAT to the tax administration.
Some information to keep in mind:
- Specific professions, e.g. bakers and cafeteria owners, can issue a flat-rate VAT statement. Their annual turnover may not exceed 750,000 euros in the past year and they can only issue invoices for a maximum of 25% of their total turnover.
- If your turnover is higher than 2 500 000 euros, you must submit your VAT return every month.
You’re off to the races! Now all you have to do is work and reap the fruits of your hard work as self-employed – or rather part of the fruits;
In the end, only part of the sum that your customers pay goes in your pocket: every year, you will pay taxes on your taxable income of the previous year.
OK, you got it: your customers pay you, you pay your suppliers, you keep track of the paperwork. It might seem overwhelming to keep track of all of it, but we have developed a solution – readily available on your most personal device, your smartphone!
Thanks to our app, you can record your expenses, prepare and send your invoices, follow-up on your payments, and know which taxes you need to pay.
By self-employed people, for self-employed people. Because we experienced all the difficulties of becoming self-employed in Belgium.
Back to you! Did we miss anything? What steps did you take to become self-employed? And what are the best things about being self-employed for you? Get in touch with us, we are here to help.