Belgium: agreement on tax shift

Written by Philippe Vanclooster 24 July 2015


On 23 July 2015, the Belgian federal government reached an agreement on the so-called “tax shift”. The tax shift is mainly aimed at i) reducing the tax burden on labour, ii) improving the competitiveness of Belgian companies and iii) creating more jobs. It involves the introduction of a number of new tax measures that may impact your business. 

The following is a (non-exhaustive) list of the tax measures that were announced by the federal government during a press conference on 23 July 2014.

  • Social security: Decrease of employers’ social security contributions to 25% (coming from 33%).
  • VAT: Increase of VAT rate on electricity to 21% (coming from 6%).
  • Withholding tax: Increase of withholding tax on movable income (e.g. interest and dividends) to 27% (coming from 25%). The withholding tax on author rights would be harmonised.
  • Speculation tax: Introduction of a so-called “speculation tax” (taxe sur les plus-values boursières spéculatives – speculatietaks). This would imply the taxation of capital gains realised by individuals on shares of listed companies held for a period of less than six months. Correspondingly, any losses realised on such shareholdings could be offset against the tax base.
  • Real estate: The introduction of a new Real Estate Investment Company (REIC) regime, dedicated to institutional investors.
  • Excise duties: Increase of excise duties on diesel, alcohol, tobacco and sodas.
  • Cayman tax: The introduction of the so-called “Cayman tax” was already announced earlier this year. There is an agreement on some modifications to increase the revenues of this tax. Broadly speaking, the Cayman tax is a taxation of certain income from legal constructions (like trusts) in the hands of Belgian resident individuals (or Belgian entities subject to legal entities tax). By virtue of the draft Act, the constructions are deemed to be tax transparent. The legal constructions in scope of this Cayman tax are, amongst others, foreign trusts, foundations, undertakings for collective investments or pension funds when not publicly offered, and low-taxed or non-taxed entities to which the Belgian individual, in one way or another, is linked as a founder, an effective beneficiary, a potential beneficiary etc.
  • Other measures: Besides the above measures, new measures would be introduced to support SMEs, the introduction of a work bonus and an increase in the exemption of labour withholding tax for shift work can be expected, the fight against fraud will be intensified etc.

The details of the above measures are not yet clear, but it could be expected that most of the measures would enter into force in the course of 2015.

In case you have any further questions, please contact your regular PwC tax consultant.