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Brussels Government Agreement 2014

Announced regional tax measures

Last updated 19 September 2014

The Brussels Government's 20 July 2014 agreement on possible regional tax measures is built around three objectives:

  • Shift from tax on labour to tax on real estate
  • Prepare and implement important tax reform towards mid of legislature (2017)
  • New opportunity to implement a complete “reset” of the local and regional taxation (through new regional competences further to 6th state reform and state of communal finances)

The below is an overview of the announced tax measures with which the regional Government hopes to improve the tax system and economic engine in Brussels. The information is obtained from the official agreement (Dutch | French).

At this stage, no further detail other than what is specified below is available.

BUSINESS TAX

 
  • Examine possibility to exempt investments in machinery and equipment, for limited period of max. 5 years, from real property withholding tax

Real estate levy

INDIVIDUAL TAX

 
  • Maintain service voucher regime within budgetary manageable framework
  • Tax deduction of housing bonus maintained but overall assessment of measure in context of 2017 tax reform

Tax reductions

 
  • 2017 tax reform: increase basic rate real property withholding tax and/or increase surcharges on real property withholding tax (with respect for budgetary equilibrium)

Immovable income

 
  • Abolition of 1% agglomeration tax (surcharge on personal income tax)

Tax rate

INDIRECT TAXES

  • Further reduce registration duties for purchase principal residence – Global in-depth tax reform effective 2017 to facilitate acquisition of home; existing tax incentives will at least be maintained and even expanded to the extent possible
  • Low fixed duty (instead of normal duty) if transaction is aborted and notary deed + agreement not to proceed with the transaction are registered
  • Reflect on mechanisms to support families with low or modest income with purchase fist dwelling
  • Registration duty discrepancy between purchase (region) and lease/building right (federal): immediate negotiations with federal government and regions on whether to maintain such discrepancy/competition and reinforcement of GAAR; where appropriate, examine possibility of preferential rate for large real estate transactions to discourage parties to use complex juridical constructions

Registration duties

  • Modernisation and simplification of existing regime for transfer of family enterprise (for gift and inheritance tax purposes), based on following fundamental principles: attractive tax regime with clear and easily applicable rules, clear parallel between gift and inheritance taxes upon transfer, more flexible preferential regime for all SME’s; research on consequences of tax competition between regions regarding intergenerational transfer of enterprises
  • According to modalities to be agreed upon, implement reform aimed at excluding gift and inheritance tax avoidance schemes; furthermore introduce simplification of tax rates

Gift and inheritance taxes

 
  • Implementation of mileage tax on trucks + 3.5 tons as of 2016
  • No city car tax ; reform of existing car taxes for cars with good environmental performances

Environmental taxes

  • Abolition of regional tax on individuals and enterprises
  • Tax pact with communes to guarantee attractive and coherent environment for economic activity
  • Regionalise hotel city tax in consultation with communes
  • Continued increase of harmonisation of tax regulations of communes and standstill on tax regulations that are detrimental for employment

Other indirect taxes

OTHER MEASURES

  • Coordination, together with other regions and federal government, of reduction of general and sector charges (federal competence) and target group reductions (regional competence) in order to make them complementary
  • Revisit from scratch aid to enterprises and link series of employment incentives to a.o. intake of trainees and formation, and redirect these employment incentives to (very) small and medium-sized enterprises in particular through increased investment subsidies, tax compensation or lower rent for enterprises
  • Support of federal initiatives aimed at lowering salary cost, in particular for low salaries
  • Reinforce ZEUS initiatives to, among others, promote hiring of employees living within the zone
  • Redefine target groups benefitting from reduction of social contributions, with emphasis not only on job seekers from areas in social-economic difficulty but also those having difficult access to labour market (e.g. low-qualified people)

Salary cost reduction

 
  • Make Brussels tax regime less complex as well as more equitable and favourable for Brussels individuals and enterprises

Simplification

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