Tax rules and social security for expats: knowledge is money
Moving abroad opens the door to new professional opportunities, adventures and insights. But what happens to your taxes? And what if you are suddenly no longer covered by your home country’s social security system? Don’t panic. With the right preparation and a few smart solutions, you can stay financially secure. Keep reading.
Working abroad: what about your taxes?
As an expat, you often deal with two tax systems: the one from your home country and the one from your host country. To avoid being taxed twice on the same income, many countries have signed bilateral tax treaties. Belgium, for example, has agreements with over 90 countries, including France, Germany, the Netherlands, Spain, Canada, the United States, Japan and many others.
In practice this means:
If you live in Spain for example and work for a Belgian employer, the treaty will determine in which country you must pay taxes. In most cases, you pay taxes in the country where you work, not where you originally come from.
Pieter (37), works at Belgian NGO in Uganda:
“I was afraid I would be taxed twice, but thanks to the treaty between Belgium and Uganda, I only had to pay local taxes. I recommend that every expat look into this properly. The rules can differ a lot between countries.”
Tip: Check the official website of the Belgian Ministry of Finance or the government portal of your future host country for an overview of applicable tax treaties.
What if you lose social security coverage?
When you work abroad, you are often no longer covered by your home country’s social security system. This only changes if a specific agreement is in place or if you are temporarily seconded.
This can affect your:
- health insurance
- pension contributions
- disability benefits
- child allowance
- unemployment benefits
For people working outside Europe or outside a treaty agreement, this often means no automatic coverage.
Anna (44), freelance architect in Chile:
“I only realised after a small accident that I had no rights to healthcare in Chile. Not even a partial reimbursement. I now have expat insurance and contribute separately to my pension. It gives me peace of mind to know that I am protected, even when things don’t go as planned.”
If you work outside the EEA, Switzerland or the UK, you can also join the Overseas Social Security system. It offers pension and disability coverage, and for an extra premium, reimbursement of 75% of medical expenses.
Smart protection: supplementary pension and income insurance
If you are not building up social rights in either your home or host country, two things become crucial:
1. A supplementary pension
Most expats do not build enough local pension rights. Pension rights in Belgium are often frozen while you are abroad, and those acquired outside Europe are often not transferable if you return.
Solution: Set up a supplementary pension plan designed for expats. This gives you control over your financial future, wherever you live.
Léon (52), business analyst in Dubai:
“I’ve worked outside Europe for years. Thanks to my supplementary pension plan, I keep saving for my retirement. My employer contributes part of my salary, and I can add to it myself. It gives me financial security, even if I return to Belgium later.”
2. Disability insurance
What happens if you become unable to work for months due to illness or an accident? In Belgium, the mutual health insurer helps you. Abroad, you're often on your own.
Solution: Take out income protection insurance. It provides a monthly payment if you’re unable to work, tailored to the needs of mobile professionals.
Karim (41), digital nomad in Thailand:
“I thought I was safe — young and healthy. But then I had a motorbike accident. Luckily, I had income insurance with Expat & Co. They covered my medical costs and compensated for my lost income.”
Checklist to avoid unpleasant surprises
- Know your status: Are you temporarily seconded, self-employed or a long-term emigrant? Each status affects your tax and social security rights differently.
- Clarity = peace of mind: Finalise your tax status before you leave and reassess your situation each year, especially if your job, residence or legal status changes.
- Get professional support: The right advice makes a big difference. A specialised insurer like Expat & Co understands your situation and offers the right products.
In short: being prepared pays off
Life as an expat is a wonderful experience. If you do your homework. By avoiding double taxation, securing your social protection and choosing a solid pension and income insurance plan, you give yourself and your family financial security and peace of mind. Plan ahead and get expert support.
Want to know more about social security and tax rules for expats?
Reach out to the experts at Expat & Co and discover the solutions tailored to your needs at expatinsurance.eu