Agreement on the federal budget and economic recovery measures

Written by Nicolas de Limbourg 20 November 2012


Today an agreement was reached with respect to the Federal Government’s budget for 2013 and new economic recovery measures.

After final intense negotiations and following a quest to find an additional 400 million euro in order to finance a decrease of employment (i.e. wage) costs for undertakings in Belgium, the following new tax measures affecting individual taxpayers are being anticipated:

  • It is envisaged that withholding tax on moveable income originating from savings will increase to 25% for all types of income and will become the final tax rate again (as this was traditionally the case in the past, for certain interest income received before 1 January 2012).Interest from ordinary savings accounts (to the extent the aggregate interest exceeds the tax-free threshold of EUR 1,830 per taxpayer for tax year 2013) and interest from the “Leterme State bonds” will remain taxable at (a withholding) tax rate of 15%. The (withholding) tax rate applicable to liquidation surpluses remains 10%. Dividend income from Belgian real estate infrastructure funds (vastgoedbevaks/sicafi) continues to be taxed at 15%.
  • Premium taxes which are in principle due on life insurance contributions will increase from 1.1% to 2%, except for premiums paid for life insurance contracts securing a mortgage loan, group insurance schemes and pension funds.
  • The withholding tax rate in the case of temporary unemployment would be raised from 20% (current rate) to 26.75%.
  • A new and final (one-off) tax amnesty procedure (limited in time) will be organised so as to give taxpayers a final opportunity to regularise undeclared income or untaxed assets with a single final tax return. The regularisation payment rates have not yet been set but may be expected to exceed the percentages of 6% or 9% which were applicable during the first tax amnesty procedure, initiated in 2004.

More details will be officially announced as the various envisaged new measures will be explained in detail in Parliament tomorrow.