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Corporate Tax Alerts

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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.

Belgium implements Transfer Pricing documentation requirements

2 December 2016

On 2 December 2016, the Royal Decree detailing the implementation of the transfer pricing (‘TP’) legislation in Belgium has been published.

ECJ Advocate-General: fairness tax partly incompatible with EU law 

17 November 2016

On 17 November 2016, Advocate General (AG) Kokott to the European Court of Justice in the European Union (CJEU) issued her long-awaited opinion on the Constitutional Court’s preliminary ruling request in relation to the “fairness tax” regime’s compatibility with primary and secondary EU law.

New decisions on REITs taxable basis and on withholding tax matter

7 November 2016

This text looks at a recent court case and a recent opinion of the ECJ Advocate General in a case that is relevant for the Belgian REIT sector.

EU Re-launches Common Consolidated Corporate Tax Base

2 November 2016

On 25 October 2016, the European Commission released the revamped draft proposal for the Common Consolidated Corporate Tax Base (CCCTB). The proposal includes two draft directives that are cross-referenced and designed to operate as parts of a single package, with the CCCTB being mandatory for the largest groups in the EU.

Budget 2017 agreement update

21 October 2016

Additional information on the tax measures mentioned in the tax alert of 17 October 2016 regarding the 2017 budget agreement has come to light.

Budget 2017 agreement

17 October 2016

The Federal Government reached an agreement for the 2017 budget on Friday 14 October 2016.

The slide deck used by Prime Minister Michel during his press conference presentation on Saturday 15 October 2016 can be found here (Dutch | French).

This alert contains a summary of what has currently been confirmed by the Prime Minister and the Finance Minister regarding the tax measures included in the 2017 budget.

Belgium and Japan sign new convention to eliminate double taxation

12 October 2016

On 12 October 2016 in Tokyo, during the Belgian State visit to Japan, the respective Governments of Japan and Belgium signed the new Convention between these two countries for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance.

New law containing tax provisions deposited

3 October 2016

On 27 September 2016, the Government deposited the draft law implementing the amended Parent-Subsidiary Directive and the option to defer exit tax payment.

Notional Interest Deduction: rate for tax year 2018

15 September 2016

As was previously announced, since tax year 2014, the Notional Interest Deduction (NID) rate’s determination is based on the average reference-indices J (10-year linear bonds) of the third quarter in the penultimate year preceding the tax year. The maximum rate is 3% (3.5% for SME's) and a maximum variation of 1% is allowed from one tax year to another.

Belgian corporate income tax reform in the works

9 September 2016

The previous corporate tax alerts of 25 August and 6 September 2016 highlighted the Finance Minister’s plans to substantially reform the Belgian corporate income tax (CIT) regime.

For the sake of clarity and convenience, and as some new details on the minister’s plans have surfaced, the currently available information has been consolidated into one text.

Corporate income tax reform update

7 September 2016

The corporate tax alert of 25 August 2016 discussed the highlights of the Finance Minister’s draft plan for a reform of Belgium’s corporate income tax (CIT) regime.

Meanwhile, the initial plan has been updated and this alert briefly discusses some relevant changes. Since the revised CIT reform plan still needs to be discussed in detail within the government, it goes without saying that nothing is to be considered as final at this stage.

Corporate income tax reform: quo vadis?

25 August 2016

The April 2016 budget control agreement requested the Finance Minister to propose, by the end of September 2016, alternatives for a reform of Belgium’s corporate income tax (CIT) regime.

Mandatory Transfer Pricing reporting requirements in Belgium

07 July 2016

On 4 July 2016, the Program Law of 1 July 2016 introducing legislation implementing Action 13 of OECD’s Base Erosion and Profit Shifting (‘BEPS’) project was published in the Belgian Official Journal (Dutch | French). As expected, the new transfer pricing documentation legislation does not deviate from the draft program law.

Large Enterprises Administration –Management Department

04 July 2016

On 1 July 2016, a Management Department (‘Dienst Beheer’/’Division Gestion’) was established within the Large Enterprises Administration (‘Administratie Grote Ondernemingen’ / ‘Administration Grandes Entreprises’). 

Political agreement reached on EU Anti-Tax Avoidance Directive

22 June 2016

On 28 January 2016, the European Commission released an Anti-Tax Avoidance Package that, amongst others, included a proposal for an Anti-Tax Avoidance Directive (‘ATAD’) (see earlier Deloitte alert).

On 25 May 2016, the ECOFIN was unable to reach a political agreement on a compromise text for the proposed ATAD, and therefore decided to continue working on the proposal with the aim of reaching an agreement on the ATAD at the ECOFIN meeting of 17 June 2016 (see earlier Deloitte alert).

With no objections raised by the Member States during the silence procedure that ended 20 June 2016 at midnight, political agreement on a final compromise text of the ATAD has now been reached. The ATAD will be formally adopted at a future ECOFIN meeting.

Tax return due date for tax year 2016

2 June 2016

The Belgian tax authorities anounced on their BizTax website the due date for filing the resident and non-resident corporate income tax returns of tax year 2016.

No agreement yet on EU draft Anti-Tax Avoidance Directive

30 May 2016

Anti-Tax Avoidance Package (‘ATAP’)

On 28 January 2016, the European Commission released an Anti-Tax Avoidance Package (‘ATAP’) that, amongst others, included a draft anti-tax avoidance directive (‘ATAD’) (see this previous Deloitte alert).

On 25 May 2016, the Ecofin Council convened to discuss and agree on a compromise text of the draft ATAD, prepared by the Dutch Presidency. However, it was not (yet) able to reach a political agreement on the draft ATAD.

Draft Anti-Tax Avoidance Directive (‘ATAD’)

As a result of multiple rounds of negotiations, the provisions in the compromise text of the draft ATAD discussed by the Ecofin Council substantially deviate from the text of the original proposal. Below, the focus will be on the provisions of the compromise text regarding interest deductions, switch-over clause and CFC rules (the exit tax, hybrid mismatch rules and general anti-avoidance rule are still part of the draft ATAD but are not discussed in this text).

BEPS: Belgian program law on implementation of Action 13

30 May 2016

Within the context of the OECD’s initiative to tackle Base Erosion and Profit Shifting (‘BEPS’), Action 13 is concerned with increasing transparency through the provision of adequate information for the performance of risk assessments and the audit of transfer pricing practices. In essence, the OECD has introduced a three-tiered approach to transfer pricing documentation which requires multinational enterprises to compile (1) a Country by Country report (‘CbC’), (2) a Master file and (3) a Local file.

Currently, countries are adopting the OECD guidance into their domestic legislations. In Belgium’s case, a draft program law should soon be deposited with parliament, specifying how BEPS Action 13 would need to be implemented in Belgian law. What follows are the main elements of the proposed draft legislation.

Belgian excess profit rulings are “illegal state aid” and must be recovered, Commission says

11 January 2016

On 11 January 2016, the European Commission concluded its in-depth investigation of the Belgian excess profit rulings (EPR’s), announced on 3 February 2015. The investigation resulted with the decision that these rulings constitute unlawful and incompatible aid under EU state aid rules. The issued press release can be consulted on this page. The full text of the decision is not yet available and will only be published at a later time.

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