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Corporate Tax Alerts

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Draft Repair Law amending the Corporate Tax Reform Law: Relevance for the Belgian Real Estate Industry?

20 June 2018

During the parliamentary discussions of the Corporate Tax Reform Law of 25 December 2017 (“Corporate Tax Reform Law”), the Minister of Finance announced that a new legislative act would be drafted in order to supplement and adjust the corporate tax reform. On 11 June 2018, the federal government submitted a draft Law on Various Income Tax Provisions (the “Repair Law”) at the Chamber of Representatives (Dutch | French). The government is aiming for a parliamentary vote on the final Law before the summer break.

Several of the measures included in the Repair Law are particularly relevant for the Belgian Real Estate sector. This newsletter will highlight some of the most relevant measures. This text should be read with sufficient prudence as some measures may still change during the parliamentary approval process.

Draft corporate tax reform repair law filed with Parliament

19 June 2018

You will recall that a major reform of Belgium’s corporate tax regime was enacted by the law of 25 December 2017. This reform becomes effective in three phases (tax years 2019, 2020 and 2021, starting on or after 1 January 2018, 2019 and 2020 respectively).

On Thursday 14 June 2018, a draft repair law, filed on 11 June 2018 with the House of Representatives, became available on the House’s website (Dutch | French). This tax alert provides a brief summary of the main repair measures, grouped per phase.

Belgian Tax Authorities publish FAQ on TP documentation requirements

9 May 2018

The Belgian Tax Authorities recently published a list of Frequently Asked Questions (FAQ) on the transfer pricing documentation requirements. The FAQ is available in Dutch and French on the Belgian Tax Authorities’ website.

BEPS: Belgium to change its position on commissionaire arrangements

4 May 2018

To prevent the circumvention of the existing permanent establishment (PE) definition, the OECD recommended important changes to said definition in its BEPS Action 7 Report.  In that context, the definition of ‘Agency PE’ in Article 5, §5 of the OECD Model Tax Convention has been revised to tackle so-called ‘commissionaire arrangements’ and similar strategies aimed at avoiding a PE.

Corporate tax return due date for tax year 2018 published

4 May 2018

The Belgian tax authorities have published the due date for the resident and non-resident corporate income tax returns for tax year 2018.

Deadline for fee forms 281.50 approaching

13 April 2018

This is a reminder that the deadline for the filing of forms 281.50 for fees and commissions paid or attributed in calendar year 2017 is 30 June 2018.

European Commission issues draft Directives on the taxation of the digital economy

26 March 2018

On 21 March 2018, the European Commission issued two draft Directives on the taxation of the digital economy. Under the proposed new comprehensive solution, companies would have to pay corporate income tax in each Member State where they have a significant digital presence. In the interim, the Commission proposes a 3% revenue-based Digital Services Tax on specific digital services where the main value is created through user participation.

Corporate income tax prepayments TY 2019

15 March 2018

With the due date for the first corporate income tax prepayment approaching (i.e. 10 April 2018 for financial years ending on 31 December 2018), attention is drawn to increased penalties for insufficient prepayments for tax year 2019.

Global Tax Reset: Updated Transfer Pricing Documentation Summary

8 March 2018

Prepared by Deloitte’s Global Transfer Pricing practice, the “Global Tax Reset - Transfer Pricing Documentation Summary” compiles essential country-by-country (CbC) reporting and documentation information (including master file and local file information when applicable) for 66 jurisdictions around the world.

Constitutional Court abolishes fairness tax as of tax year 2019

2 March 2018

On 1 March 2018, the Constitutional Court rendered its long-awaited decision on the fairness tax.

The fairness tax, effective from tax year 2014, is a separate tax imposed at a 5.15% rate on dividend distributions by non-SME companies, to the extent that they offset taxable income, in the year of distribution, with current year notional interest deduction and/or tax losses carried forward. The tax applies to both resident companies and permanent establishments (PEs) of non-resident companies.

In January 2014, an annulment action was filed before the Constitutional Court on grounds of the fairness tax’s incompatibility with the Constitution, the Treaty on the Functioning of the EU, the Parent-Subsidiary Directive (PSD) and Belgium’s tax treaties.

Are you prepared for upcoming Transfer Pricing filings?

22 February 2018

The due date to submit the CbC notification (assessment year 2018) is fast approaching.

The due date to submit the CbC Report and the Master File Form, both related to assessment year 2017, depends on the financial year-end of the group. For most Belgian entities, the due date coincides with 31 March 2018.

Upcoming 2018 Transfer Pricing audit wave

18 January 2018

Based on the latest available information, the 2018 TP audit wave should be launched mid-February.

Compared to last year, the 2018 TP audit wave is expected to have a greater impact for several reasons, as outlined in this alert.

Ruling Commission: silent mergers between a B-REIF and several real estate companies do not trigger WHT within 1 year after acquisition

18 December 2017

In a recently published ruling regarding several so-called ‘silent mergers’ (i.e. 100% parent-subsidiary mergers) between a B-REIF (‘GVBF’/‘FIIS’) and several ‘ordinary’ real estate companies, the Belgian Ruling Commission confirmed that no WHT is due on the liquidation dividend following these transactions. No WHT is due regardless of the fact that the B-REIF did not hold the real estate companies’ shares for at least 1 year. This ruling could be a game-changer for the entire B-REIT / B-REIF sector (‘B-REIT’ referring to the “GVV” / “SIR”).

U.S. Tax: The international tax provisions of the Tax Cuts and Jobs Act - conference agreement

18 December 2017

On 15 December 2017, the conference committee on the Tax Cuts and Jobs Act released its report. With respect to the international tax provisions that differed between the House and Senate versions of the bill, the conferees typically leaned in favour of the Senate version.

Compared to the previous versions of the tax bill, there are some more notable changes.

TP documentation deadline extended until 31 March 2018

29 November 2017

The Belgian tax authorities granted an extension until 31 March 2018 for the submission of the CbC Report and the Master File Form related to assessment year 2017, and the CbC notification related to assessment year 2018. These were initially due by 31 December 2017. The forms due by the end of March need to be submitted in XML format.

U.S. Tax: The latest developments on the international tax provisions of the Tax Cuts and Jobs Act

15 November 2017

As covered by the 7 November 2017 tax alert, the House Ways and Means Committee released, on 2 November 2017, the original bill of the Tax Cuts and Jobs Act (TCJA). On 6 November and 9 November 2017, the House Ways and Means Committee introduced amendments to the TCJA, which made certain changes and technical corrections to several provisions, including certain international tax provisions. 

Belgian TP reporting: calendar year-end deadline

13 November 2017

Companies with a financial year-end coinciding with each calendar year-end should comply with the following Belgian TP reporting requirements before 31 December 2017 (if they meet the applicable thresholds and conditions as covered by previous alerts):

·      Master file Form

·      Country-by-Country report

·      CbC Notification

Since October 2017, the above forms have to be filed through the tax administration’s online portal, which requires (i) a specific access procedure and (ii) an electronic XML file.

U.S. Tax: The international tax provisions of the Tax Cuts and Jobs Act

7 November 2017

On November 2, 2017, Kevin Brady (R-TX), Chairman of the House Ways and Means Committee, unveiled his opening bid on comprehensive tax reform - the Tax Cuts and Jobs Act, H.R. 1 (the "Bill").

The key proposals in the bill are business, international tax and individual tax based.

Belgian TP reporting for 2016 can still be submitted by email

31 October 2017

The Belgian tax authorities have confirmed that it remains possible to submit the Belgian TP reporting forms by email, to the Belgian administration’s BEPS13@minfin.fed.be address.

Corporate tax returns: Additional extension of filing deadline

27 September 2017

The minister of finance has granted an additional extension until and including 29 September 2017 to file the corporate income tax returns, which were initially due today (27 September 2017).

Additional guidance on Transfer Pricing reporting

25 September 2017

The Belgian tax authorities published a new practice note (2017/C/56) which includes additional guidance to comply with the new transfer pricing (“TP”) reporting requirements in Belgium.

The nine takeaways from the State of the European Union

15 September 2017

The President of the European Commission, Jean-Claude Juncker, delivered his State of the European Union speech on 13 September 2017.

This text outlines nine standout points that may affect businesses.

Belgian transfer pricing reporting deadlines are approaching

8 September 2017

For financial years starting on or after 1 January 2016, entities that meet one of the reporting thresholds will need to submit transfer pricing documentation forms to the Belgian tax authorities. 

Belgian country-by-country reporting notification deadline approaches

11 August 2017

Entities that meet CbC thresholds will need to provide the first country-by-country (CbC) reporting notifications to the Belgian tax authorities by 30 September 2017.

For this first year’s notification, an extension until 30 September 2017 applies, regardless of the company’s financial year-end. Thereafter, notifications are due by the end of the financial year. 

U.S. tax: Notice 2017-36 delays application of Section 385 documentation regulations

3 August 2017

On July 27, 2017, the U.S. Department of the Treasury (“Treasury”) and the Internal Revenue Service (IRS) issued Notice 2017-36, which states the intent of Treasury and the IRS to delay the application of the documentation rules set forth in Treas. Reg. § 1.385-2 (the “Documentation Regulations”) for 12 months such that the rules would apply only to certain interests issued or deemed issued on or after January 1, 2019. Taxpayers may rely on the delay pending the issuance of implementing regulations.

Federal Government reaches agreement on corporate tax reform

26 July 2017

On the night of 25 July 2017, the Belgian Federal Government reached an agreement on the corporate tax reform which was anticipated and announced last year. The most important measure concerns the gradual decrease of the default corporate tax rate.

An overview of the major measures included in the agreement follows below. The SME specific measures will be addressed in a separate alert.

Belgian TP filing deadlines and CbC reporting guidance

5 July 2017

The deadlines for complying with Belgium’s transfer pricing reporting requirements for 2016 for financial years (FYs) coinciding with the calendar year are approaching rapidly.

On 6 April 2017, the OECD released additional guidance on the implementation of CbC reporting under BEPS action 13, which clarifies several interpretation issues related to the data to be included in the CbC report.

New discussion draft released on attribution of profits to PEs

26 June 2017

The OECD on 22 June 2017 released two non-consensus discussion draft documents concerning the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (TPG). These documents are part of the base erosion and profit shifting (BEPS) project, which began in 2013. The first discussion draft, which deals with work in relation to BEPS action 7, contains additional guidance on the attribution of profits to permanent establishments (PEs). The second discussion draft, which deals with BEPS actions 8-10, provides proposed revised guidance on the application of the transactional profit split method. This alert will focus on the discussion draft concerning attribution of profits to PEs. A separate alert will focus on the discussion draft concerning profit splits.

BEPS Action 15: 68 jurisdictions sign the multilateral instrument to modify bilateral tax treaties

12 June 2017

On 7 June 2017, representatives covering 68 jurisdictions gathered at the OECD’s headquarters in Paris for the signing of the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (‘the Convention’ or ‘MLI’).

FAQ on fuel card and other fuel costs published

1 June 2017

On 30 May 2017, the tax authorities published an FAQ regarding the new corporate tax rules for fuel card and other fuel costs (Dutch | French), introduced by the Program Law of 26 December 2016.

Effective 1 January 2017, the rules regarding the separate disallowed expense for company cars have been thoroughly modified.

CJEU issues its “fairness tax” verdict

17 May 2017

The “fairness tax”, voted in July 2013 and effective from tax year 2014, is a separate income tax imposed at a 5.15% rate on dividend distributions by non-SME companies, to the extent that these companies offset taxable income, in the year of distribution, with current year notional interest deduction and/or tax losses carried forward. The “fairness tax” is applicable to resident companies as well as permanent establishments of foreign companies.

Tax return due date for tax year 2017 published

12 May 2017

On their BizTax website, the Belgian tax authorities have published the due date for filing tax year 2017 resident and non-resident corporate income tax returns.

Ruling Commission’s Board temporarily not operational

5 May 2017

As covered by the press on the morning of 5 May 2017, the Ruling Commission’s Board is not operational until further notice.

This is due to a decision by the Council of State dd. 28 April 2017 annulling the appointment of the three French-speaking Board members, Matthieu Bataille, Serge Riga and Véronique Tai. This decision was triggered by an appeal introduced by José Vilain, a former member of the Board. This decision does not affect the appointment of the 3 Dutch-speaking Board members, Steven Vanden Berghe, Guy Giroulle and Luc Saliën.

Deadline for fee reporting obligation 281.50 approaching

21 April 2017

With the deadline for the fee reporting obligation 281.50 fast approaching (i.e. 30 June 2017 for costs and benefits in kind attributed to calendar year 2016), affected taxpayers should be aware of their obligations and the fact that the Belgian tax authorities will likely be enhancing their scrutiny to ensure compliance.

Deloitte & Laga assisted with the first accredited B - REIF

20 April 2017

On April 12, Deloitte & Laga obtained the accreditation of the first Belgian Real Estate Investment Fund (‘B-REIF’) (accreditation as a “FIIS”/“GVBF”, i.e. “Fonds d’Investissement Immobilier Spécialisé” / “Gespecialiseerd VastgoedBeleggingsFonds”).

Insufficient corporate income tax prepayments: increased penalties

24 March 2017

With the due date for the first corporate income tax prepayment fast approaching (10 April 2017 for financial years ending 31 December 2017), attention is drawn to a change in legislation relating to insufficient prepayments for tax year 2018.

ECJ denies WHT exemption under the Parent – Subsidiary Directive for dividends to Dutch FBI

13 March 2017

This newsletter discusses a recent judgment by the European Court of Justice which may be relevant for the Belgian REIT (‘Real Estate Investment Trust’, i.e. the “GVV / SIR”) and REIF (‘Real Estate Investment Fund’, i.e. the “GVBF / FIIS”) sector.

Potential U.S. tax legislative developments and President Trump tax proposals

3 February 2017

With the start of the new year, U.S. tax reform is a top priority for both the Legislative and Executive branches in 2017.  While it has been a constant discussion topic the past 10 years, this year the Republicans control both the Executive and Legislative branches starting in May 2017, which makes reform much more likely.

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