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Belgian Government Agreement 2014

Announced federal tax measures

Last updated 17 October 2014

On 7 October 2014, the political parties involved in the Government coalition (CD&V, MR, N-VA and Open Vld) reached a Federal Government Agreement.

Below you will find an overview of the tax measures included in this agreement. This summary is based on currently available information and may be subject to change. Deloitte Belgium’s tax experts will closely monitor the developments around these measures.

BUSINESS TAX

 
 
  • The scope of application of the “catch-all provision” would be limited to the cases initially targeted (supply of services); perverse effects would be eliminated;
  • Other non-resident tax provisions may also be changed if they distort the market.

Non-resident taxation

  • Examine expansion of the patent income deduction to income from software licenses (within budgetary neutral framework).
  • Reform and simplification of disallowed expenses with 3 baskets: fines and taxes; non-individualised benefits; liberalities.
  • Maximum streamlining of special rules restricting expenses or costs in both income tax and VAT legislation.
  • Conclusion of a “tax pact” to foster legal security for entreprises.
  • Simplification of accounting legislation for companies with maintenance of obligation to publish annual accounts (special rules for SME’s needed).
  • Support for growth of enterprises, in particular SME’s, e.g. by encouraging productive investments.

Other

INDIRECT TAX

Major priorities include:

  • Further elaboration of the AEO (Authorised Economic Operator) regime
  • Implementation of projects such as System Based Approach, Entry into the Record, etc.
  • Elaborate the “Green Lanes” pilot project
  • Further development of customs applications
  • Implementation of the Single Window
  • More targeted audits based on automated risk assessments
  • More structured and proactive communication (both internally and externally).

Customs

 
 
  • The Government will continue Belgium’s constructive cooperation to the gradual introduction of a FTT (under the reinforced cooperation). Belgium would advocate that this tax focuses on speculative transactions, not on genuine economic activities (e.g. intra-group transactions), nor on certain transactions of pension funds and insurance companies, nor on government securities.

Financial transactions tax

  • As of 1/1/2016 the current subscription tax and annual tax on credit institutions would be replaced by one unified annual tax on credit institutions, taking into account their business model. The tax would be based on the volume of derivatives and the balance sheet total (corrected for market infrastructure institutions), next to the volume of regulated savings deposits.
  • Modernisation as of 1/1/2015 of the “griffierechten/droits de greffe”: where possible integration and simplification of the applicable rates.
  • Evaluation of energy taxes.

Other indirect taxes

OTHER MEASURES

  • Continued battle against tax fraud.
  • Modernisation of collection and audit procedures.
  • Major focus on exchange of information (within Belgium as well as data exchange with third countries).
  • Significantly increase supervision of e-commerce (e.g. application of VAT).

Tax fraud

  • Reduction of the base rate of employer’s social contributions before end of legislature, targeted base rate: 25%.
  • Maintenance of existing rates below 25% (low salaries, first 5 hires, etc.).
  • General 1% payroll exemption would be converted into additional rate reduction of employer contributions.
  • SME’s: reinforce and simplify reduction for first 3 hires.
  • Continue payroll exemption for researchers and examine if it is appropriate to reinforce this exemption. Notification of R&D programs should occur electronically (to reduce administrative burden).
  • Make payroll exemption for “aid zones” as soon as possible operational.

Salary cost

  • Increase mutual trust between taxpayer and tax authorities.
  • Decrease administrative charges related to taxation.
  • Coordination and consolidation of all federal tax legislation in one Federal Tax Code.
  • Law changes automatically followed by FAQ and update of administrative commentaries.
  • Harmonisation of tax procedures to increase taxpayer’s legal security.
  • Ruling Commission remains autonomous service; its functioning would be assessed and if needed reinforced to optimise access by SME’s.
  • General Anti-Abuse Rule: Ruling Commission can issue GAAR rulings; examine how the GAAR can be formulated to increase security for taxpayer.
  • Assess differences between tax penal law and common penal law, in order to abolish anomalies.

Other

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