On 26 July 2017, the Belgian federal government reached an agreement on an important corporate tax reform. The contemplated changes go far beyond corporate tax as they also have a direct impact on the taxation of financial products, hence on the FS industry in general.
Belgian Tax on Savings Income (art. 19bis ITC)
The 25% Asset Test threshold will be removed. It means that every fund, regardless of the percentage of investment in debt claims might soon be subject to the Belgian fund tax reporting.
It thus increases the pressure on asset managers to proceed to the proper Belgian TIS computation and/or Asset Test and reporting to the paying agents.
Contractual investment funds (FCP/GBF)
The tax system for distributions of contractual investment funds will be aligned with distributions made by investment companies.
These changes will also require adapting commercial communications towards Belgian clients of course (KIID, prospectuses, website info as the case may be, etc.).
Private equity funds
The private PRICAF system will be reviewed (relaxation of control rules, management activity, and notion of temporary investment).
Yearly tax on securities accounts
The securities accounts will be subject to a yearly tax (a bit similar to the existing net asset tax applicable to funds and insurance companies). Any investor holding one or more securities accounts in Belgium or abroad with total assets (shares, bonds, funds) exceeding EUR 500,000 will be subject to tax at a rate of 0.15% of the total amount. The tax will in principle be levied by the financial institution.
The personal tax exemption applicable to interest income from savings deposits will be limited to EUR 940 (compared to EUR 1.880 previously).
There’s no information available as to whether Belgium will implement the recent case law of the Court of Justice of the European Union, hence relax the criteria for cash deposits to qualify for the exemption (see our EUDTG newsflash in this respect).
A new personal tax exemption on dividends will be implemented. An amount of up to EUR 627 will be exempt from personal tax.
Tax on stock exchange transactions
The rates of the stock exchange transactions tax will – again – increase. The rates of 0.09% and 0.27% will respectively increase to 0.12% and 0.35%.
The Cayman Tax will be amended at various levels so as to increase its effectiveness and close some existing loopholes. The changes are in particular expected to target intermediate structures.
Please note that these are general guidelines on the “budget” that have been announced by the government. Needless to say, the different measures will need to be reviewed once the details of the draft bill of law will be disclosed.
Don’t hesitate to visit regularly our tax reform website for more general information on the upcoming Belgian tax changes.