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New Belgian Budget: limited tax shift and various tax increases

Belgium
The Belgian Government has reached an agreement on the new budget measures following the so-called 'tax shift'. A first review of the various measures and the tax shift indicates that the final result of the tax shift measures is quite limited and uncertain since the government has not yet produced clear data on the precise effects of the tax shift. Taxand Belgium examines the new tax measures released in accordance with the tax shift.

The following measures relate to the tax shift:

  • For a large category of employees the employer’s part of the social security contributions will be reduced from 33% to 25% 
  • The income tax rates will be modified in order to allow a large group of taxpayers to benefit in 2016 from an increase in their net monthly income up to a EUR 100 
  • Various charges and contributions applied to night work and shift work will be reduced
  • Various new tax measures will stimulate technical innovation and research & development

The following tax increases will be introduced:

  • VAT on electricity will be increased from 6% to 21%
  • Excise duties on gasoline, tobacco products and alcohol will be increased 
  • A so-called “health tax” on sugary products and certain types of “unhealthy” food will be introduced 
  • The withholding tax on moveable income will be increased from 25% to 27%, except for interest on saving accounts
  • Capital gains on stock exchange shares realised within a period of six months after the date of acquisition, will become subject to a so-called “speculation tax”. The tax regime on non-stock exchange listed shares will not be changed or modified 
  • The Cayman tax (which is to be introduced in the very near future and which taxes certain types of offshore income) will be modified in order to increase its expected tax revenues 

Your Taxand contact for further queries is:
Geert De Neef
T. + 32 2 787 91 11
E. Geert.DeNeef@abtaxand.com

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Taxand's Take

The purpose of the tax shift is to reduce income taxes on professional income, to restore the competitive position of Belgian industries and businesses, and to create jobs. The measures outlined here will have to be further elaborated and formalised as new tax legislation during the coming weeks and months

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