New tax measures
The Program Law of 25 December 2016 was published in the Belgian Official Journal on 29 December 2016. What follows are the measures included in this Program Law.
Last updated 15 March 2017
- Fuel costs and beneficiary’s personal contribution
- Stock exchange tax
- Withholding tax increase
- Speculation tax abolished
Fuel costs and beneficiary’s personal contribution
The Program Law (Dutch | French) stipulates that employers covering fuel costs related to a company car must report in their corporate tax return a separate disallowed expense for the costs of the car in an amount equal to 40% of the lump sum benefit in kind related to the company car (instead of the existing 17%). The 17% rate will continue to apply for company cars for which the employer does not cover private fuel costs.
Given the increased disallowed expense, employers may want to re-examine their company car policies to determine whether, and to what extent, they wish to continue to cover fuel costs related to company cars.
Until the end of 2016, disallowed expenses were calculated taking into account the beneficiary’s deductible personal contribution. Hence, the employee’s personal contribution make it possible to cancel out the employer’s tax burden.
As from 1 January 2017, however, the employee's personal contribution will no longer reduce the lump sum value of the benefit on which the employer's disallowed expense (17% or 40%) is calculated. In other words, the disallowed expenses always will be equal to 17% or 40%, without any possibility to deduct the beneficiary’s personal contribution.
These changes will reduce the effectiveness of the policies that some employers have implemented following the extensive modification to the company car tax system in 2012, which consisted of combining the provision of a fuel card with a required personal contribution equalling the fuel costs. This model will become more expensive for the employer.
Stock exchange tax
The applicable scope of the tax on stock exchange transactions is expanded:
- The tax becomes applicable to transactions ordered by a resident through a foreign intermediary; and
- The maximum amounts of the tax is doubled (EUR 650 to EUR 1,300; EUR 800 to EUR 1,600 and EUR 2,000 to EUR 4,000).
Withholding tax increase
The standard withholding tax rate levied on dividends, interest and royalties are increased from 27% to 30% on 1 January 2017. The existing reduced rates and exemptions foreseen by Belgian domestic law are maintained.
Simultaneously, the applicable tax rate on the distribution of “new liquidation reserves” (i.e. new reserves built up since 1 January 2017) within the first five years are increased from 17% to 20%. The “old liquidation reserves” still may be distributed at a 17% rate.
Distribution after the first five years still will be possible at a 5% rate, regardless of whether the reserves are “old” or “new.”
Speculation tax abolished
The speculation tax, which entered into force on 1 January 2016, is abolished for capital gains realised as from 1 January 2017.