After intense negotiations, the Belgian government reached an agreement on the Belgian federal budget. Addressing the ongoing energy crisis, limiting the budgetary deficit and stimulating employment are some of the key topics that have shaped the agreement.
It also contains several important tax measures an overview below:
- Temporary Belgian minimum tax: as a result of the postponement of implementation of the Global Minimum Tax system (the so called Pillar 2) with one year (expected entry force on 1 January 2024 instead of 1 January 2023) , the Belgian government decided to introduce a one-shot measure that reduces the use of the tax assets in the current ‘basket system’ from 70% to 40% (above the EUR 1 mio threshold). This measure would only apply until the Pillar 2 system is introduced into Belgian legislation.
- The notional interest deduction regime would be abolished for large companies and only remain available for small and medium enterprises.
- The financial sector will make an additional contribution as a result of the fact that the banking tax and the insurance tax will no longer be (fully) tax deductible.
- The scope of the copyright regime will reduce drastically and will likely only apply in situations of direct commercialisation of the copyrights.
- The lump sum system for foreign tax credit on royalties 15% will be capped to the actual foreign withholding tax applied.
- Measures will be taken to reduce plastic packaging.
Energy
- Introduction of a tax on surpluses in the energy sector till June 2023 (to be extended if authorised by the European Commission). The tax would be introduced with retroactive effect to 1 January 2022.
- The reduced rate of 6% VAT on gas and electricity will remain in place and a reform of the excise duties on gas and electricity will be foreseen.
Business competitiveness
- Cost of inflation would be mitigated by
- a decrease of employer’ contributions of 7,07% in Q1 and Q2 of 2023
- a postponement of payment of employer contributions for Q3 and Q4
- Extension of the supporting measures including a reduction of excise duties on gas and electricity, the possibility to use the temporary “energy” unemployment as well as the “overbruggingsrecht energie”/”droit passerelle énergie” for self-employed till the end of the first quarter of 2023
Next steps
In a next step, the measures agreed upon have to be put into law and go through the required parliamentary procedure before they will be published into the Official Gazette (Belgisch Staatsblad / Moniteur belge) and enter into force.
For more insights on the impact of these announced measures, reach out to your regular PwC contact or Pieter Deré, Evi Geerts or Jean-Philippe Van West.
