Budgetary control in Belgium: New tax measures announced

Philippe Vanclooster 31 March 2015


On 30 March 2015, the Belgian government announced new Belgian tax measures in the framework of the budgetary control.

They concern:

Fight against fraud

The fight against tax fraud will be pursued. The estimated net revenues are MEUR 160.

Cayman tax: applicable as from calendar year 2015

The “Cayman tax” would already be applicable as from calendar year 2015. The Cayman tax is a taxation of certain income from certain legal constructions, in the hands of Belgian individuals and Belgian entities subject to legal entities income tax. The legal constructions in scope include – without being limited to – foreign trusts, foundations, undertakings for collective investments or pension funds when not publicly offered, low-taxed or non-taxed entities etc. to which the Belgian individual (or Belgian entity subject to legal entities tax) is, in one way or another, linked as a founder, an effective beneficiary, a potential beneficiary etc.

Legal fictions of tax transparency would apply to certain legal constructions (unless they are already subject to an effective tax rate of at least 15%) so that the real estate income, movable income (interest, dividends, royalties) and miscellaneous income (defined according to Belgian income tax law) collected by the legal constructions would become subject to immediate effective taxation in Belgium, even if the income is not yet distributed to the beneficiary.

The estimated revenues are MEUR 50.

Incentives for start-ups

The government announced it intends to spend MEUR 30 for start-up companies. A tax reduction is provided for investors in new companies (SMEs). Start-ups would be able to benefit from reduced contributions on labour (e.g. exemption of part of the wage withholding taxes). Crowd-funding would also be fiscally supported. In addition, there would be an investment deduction for digital investments (e.g. cyber security, payment systems etc.)

Liquidation reserve: current measure to be extended

Currently, SMEs can benefit from a reduced taxation of 10% (instead of generally 25% or 15%) on distributions by the creation of “liquidation reserves”. Generally, the profits realized in FY2012 and FY2013 do not qualify for either this measure or, an old (similar) measure. However, the government has now stated that also these profits (realized in FY2012 and FY2013) will qualify for the reduced taxation on distributions.

Tax for diamond sector

A special taxation for companies in the diamond sector would be introduced.

Tax shift: postponed

The tax shift (shift from taxes on labour to other sources) – announced in 2014 in the framework of the government agreement – would be postponed to a later date. However, measures in this respect could already be expected before the summer of 2015.

No increase in VAT rate and no change in tobacco tax system

For the moment, the current VAT rate (standard rate of 21%) would be maintained. Furthermore, the taxation regime for tobacco would not change.

The above measures have not yet been enacted and hence the details of these measures are still subject to change.

We will keep you posted on important updates via this newsletter (all newsletters can also be found on news.pwc.be).

For more details, please contact your regular PwC tax advisor.