Yesterday, the Belgian Government reached an agreement on the Belgian budget. The budget agreement combines a number of measures to transition the Belgian economy after Covid in an environmentally balanced manner. Some points will need further agreement with the social partners, and some measures are taken explicitly in view of the recent surge of energy prices.
Looking at the numbers first: the budget deficit would be reduced next year from 5.4% to 3.1% of GDP following the end of the Covid support measures. The government decided to make an additional effort of EUR 2 billion. One billion would be foreseen for strategic investments (aim is to reach an investment level of 4% of the GDP in 2030). A quarter of these investments would be dedicated to the railways (more trains, more accessible stations, doubling the transport of goods by rails, …).
Transitioning an economy after the Covid pandemic, and whilst there is significant pressure on the energy market which could in the end backfire for the economic recovery, is a challenge. Some of the most important tax related measures include (i) the increase of resources for the transfer pricing team of the Belgian tax authorities (ii) the gradual transition to E-invoicing for B2B transactions, (iii) a number of environmental taxes aiming to stimulate the use of greener sources of energy (e.g. the introduction of an airplane tax for short flights) and also a number of measures aiming to support the economic weakest in society and to reduce the taxes on labour.
Beyond taxation, the agreement puts forward a number of new measures covering a variety of areas such as energy, labour and tax and social contribution:
- A number of measures are taken to protect the economic weakest in society in order to limit the price increase and the agreement provides that an unilateral increase of advance payment for energy is legally prohibited.
- Measures regarding the re-insertion of long-term sick employees and sanctions would be foreseen for employees and employers
- Sick leave: medical certificate not required for an absence of one day (three times a year) (except in SME)
- Right to training at least 5 days per year for each employee
- More flexibility for night work in the e-commerce sector
Tax and social contribution
- Basis for calculating the social security contribution for professional athletes (including football players) will be increased
- Airline tax on short flights up to 500 kilometers
- Gradual abolition/phasing out of the tax benefit on the “professional diesel” (in this regard, there is a draft law on the greening of the mobility providing an increased deduction for investments in zero-emission trucks and recharge infrastructure)
- Reform of the wage withholding tax system (notably for shiftlabour and nightlabour)
- Adjustment to the special social security contribution
- Tax deduction for child care is increased to 14 EUR/day/child
- Amendments to the expat tax provisions
- The amount paid in relation to certain settlements will no longer be tax deductible
- Increased efforts in the fight against tax fraud
- VAT and excise duties on tobacco will have to be changed. A legal framework for products from tobacco and e-cigarettes will be created and the excise duties on the tobacco products will be increased from 1 January 2022
- Furnished accommodation rented by private owners will be submitted to VAT
For more insights on the impact of these announced measures, reach out to your regular PwC contact or Pieter Deré or Evi Geerts.
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