Belgium: new agreement on Tax Shift


On 10 October 2015, the Belgian federal government reached a new agreement on the so-called “tax shift”. The tax shift is the shift from tax on labour to other taxes.

The objectives of the tax shift are:

  1. To respect the budgetary engagements;
  2. A revival of the economy by creating more jobs;
  3. Reducing labour taxes to increase competitiveness;
  4. To give support to SMEs and entrepreneurs;
  5. To increase the purchasing power for low and moderate salaries;
  6. To fight against poverty;
  7. To reduce the tax burden.

The following tax measures were announced by Prime Minister Charles Michel during a press conference on 10 October 2015 (some of them were already announced in July 2015 (see https://news.pwc.be/belgium-agreement-tax-shift/ ).

  • Social security: Decrease of employers’ and self-employed social security contributions;
  • Individual income tax rates – statutory tax rates ad brackets: Abolition of 30% rate and increase of the tax bracket of the 45%-rate;
  • Individual income tax – professional expenses: Increase of the lump sum amount for professional expenses;
  • Individual income tax – tax exempt amount: Increase of the amount that is tax exempt;
  • Labour withholding tax: Increase of the exemption from labour withholding tax in case of shift work;
  • Speculation tax: Introduction of a so-called “speculation tax” (taxe sur les plus-values spéculatives – speculatietaks).
  • Withholding taxes on movable income: Increase of withholding tax on movable income, such as interest and dividends, from 25% to 27%;
  • Excise duties: Increase of excise duties on diesel, alcohol, tobacco and sodas.
  • Fight against fraud: Intensify the fight against fraud.
  • Fiscal amnesty: A new measure regarding fiscal amnesty.
  • Other measures: Introduction of specific measures for investments (e.g. increase of investment deduction for SMEs) and promoting high technology.

The details of the above measures are not yet clear, but it could be expected that most of the measures would be enacted in the course of 2015. In case you have any further questions, please contact your regular PwC tax consultant.