After the introduction of the first waves of supportive financial measures linked to the first ‘lockdown’ from March till May 2020, the newly formed government has decided to take additional economic, tax and financial measures. The goal is to soften the economic consequences of the restrictions introduced last week in order to cope with the second wave of the COVID-19 pandemic.
As during the first wave of the COVID-19 pandemic, the federal government has agreed today to introduce several specific tax measures. As regards the economy, the measures should safeguard sufficient cashflow and solvability for the companies hit most by the restrictions, though some measures apply for all companies.
In this newsflash, we focus on the business related measures most relevant for companies, self-employed and employees.
Some measures are extended, whereas other measures are new or re-introduced. As a general note, to date, no general extension for VAT, corporate income tax or social security tax filings or payments has been announced.
As such the following existing measures are extended
- Possibility to obtain an individual delay on the payment of taxes, without the levy of penalties or late payment interest;
- Reduction of the VAT-rate to 6% for hand sanitiser and face masks;
- Extension of the practice to use notarial proxies, free of charge;
- The increased investment deduction of 25% is made available till the end 2022, also allowing SME’s to deduct a larger amount of their investments from their taxable basis;
- The current system of guarantees towards SME’s and the system to guarantee credit insurance is available till the end of June 2021;
- The minister of Finance will start new negotiations with the financial sector to reach an agreement on the extension of the current moratorium for certain business loans.
- Revamp of the temporary unemployment due to force majeure till the end of March 2021.
- Deferral for the payment of the ‘vennootschapsbijdrage’ till the end of 2020;
- Extension till end of December 2020 to benefit from the replacement income for self-employed individuals ‘transitional rights’ (“overbruggingsrecht” / ”droit passerelle”);
- An extension of the reduced professional WHT for temporary unemployed persons;
- Extended scope to use temporary unemployment by employees in case their child must be quarantined.
- A re-evaluation with the stakeholders on a possible extension for the existing moratorium on the payment of mortgage backed loans, consumer credit and potentially leasing contracts.
The below are newly announced measures
- The agreement between the social partners regarding the partial intervention of the federal government in funding the holiday pay for temporary unemployed persons.
- Extension of the scope to all companies that were forced to close (and no longer just the horeca- and event sector) to request an exemption from payment of social security contributions. Also suppliers to companies that were forced to close and register a drop of 65% in turnover can file such a request. The total amount of the exemption per company will be capped.
- Introduction of a new, permanent ‘transitional right’ regime in case of a crisis as from January 2021, linked to a drop in turnover (other modalities to be further determined);
- A temporarily increased amount for the ‘transitional right’;
- Instalment plans for self-employed that previously obtained a deferral for the payment of their social security contributions.
- Entitlement to a supplement for employees that were temporary unemployed during more than 52 days in 2020;
- Additional budget of EUR13,07mio for the so – called ‘consumption’- cheques and an extension of the validity of those for persons in the health-care sector till the end of 2021.
For some specific sectors, and of course, mostly aimed at the health-care sector, additional measures and financial impulses have been announced. The most eye-catching economic measure is likely to allow temporary unemployed persons and seconded employees (detachering) to temporarily work in the health-, education- and (partially the) agricultural sector.
Note that the regional governments also recently announced some measures in their respective fields, such as a delay for the payment of registration duties and inheritance taxes.
Do you want to stay up to speed with the developments around the Belgian government? Visit our Belgian government webpage.
In case of any questions, please do not hesitate to contact Christian Van Craeyvelt or Hugues Lamon.