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Recent changes to corporate tax and VAT

Belgium

On 9 October 2014 the respective parties involved in the negotiation for a new Belgian federal government reached a formal agreement. Taxand Belgium provides an overview of the most important measures retained for corporate tax and VAT in the new government agreements.

Corporate tax

  • The transitional 10% withholding tax regime on liquidation bonuses that expired on 30 September 2014 would become partially permanent for SME – companies. Those entities would be allowed to transfer each year an amount of maximum 50% of their taxable profits to a separate unavailable balance sheet reserve account, which is subject to anticipative levy of 10% by the company. The distributions of this reserve at the occasion of the liquidation of the company would be exempt from  withholding tax. In case the reserves are distributed after a period of 5 years as dividend, these will  trigger a withholding tax of 5%. In case the distribution is made within the initial period of 5 year an additional withholding tax of 15% would be levied
  • The 309 % secret commissions fee tax regime would be modified, in particular the percentage applied would be reduced and also the regime of the disallowed items would be subject to a review
  • Intercommunal bodies would become subject to corporate income tax instead of the legal entities tax as of 1 January 2015

VAT

  • Electronic services (e-commerce) acquired by Belgian residents from EU companies would become subject to Belgian VAT
  • The application of the reduced 6 % VAT rate for renovation and construction works to private dwellings would only be available for a 10 year old building instead of the current 5 year
  • It will be investigated if the VAT-exemption for small entities could be increased to EUR 25,000 

Discover more: Changes to corporate tax and VAT 


Your Taxand contacts for further queries are:
Geert de Neef
T. +32 2 787 91 11
E. geert.deneef@abtaxand.com

Luc Jouk
T. +32 3 238 92 91
E. luk.jouk@abtaxandbelgium.com

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Taxand's Take

Multinationals and nationals operating within Belgium should make note of tax changes and adjust accordingly.

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