On 11 August 2017, an administrative circular letter was issued with respect to the Belgian exit taxation rules.
Belgium amended, via the Act of 1 December 2016, the Belgian tax provisions on exit taxation largely in line with the Anti-Tax Avoidance Directive (ATAD) requirements on exit taxation. More precisely, the Act introduced amongst others the option for the taxpayer to choose between an immediate payment of the exit tax charge or a spread payment of the exit tax charge. The exit tax can be spread over a 5 year period. To qualify, the transferee of the Belgian assets must be established in another EU Member State or an EEA Member State with which Belgium concluded an agreement on mutual assistance in the recovery of taxes.
The Belgian tax authorities have now published a circular letter to provide further guidance on this topic. The circular explains the procedural aspects of claiming a spread payment of the exit tax charge and provides that, in order to opt for deferral of the exit tax liability, the taxpayer will have to make a formal request within two months from receipt of the tax assessment. A form with information about the assets transferred should be enclosed to the request (this form is yet to be published on the tax authorities’ website). The form will have to be resubmitted each year to determine whether the benefit of the spread payment can still be applied. The tax authorities could require a guarantee, but only if there is a real risk of non-recovery of the outstanding balance. No late payment interest is due if the five annual instalments are paid in time.
The circular lists furthermore a number of situations that trigger an immediate payment of the unpaid tax charge. Examples include the situation where the transferring taxpayer disposes of the assets or where certain assets would leave the EEA.
While the ATAD rules on exit taxation will enter into force on 1 January 2020, the Belgian exit taxation rules are already applicable for transactions carried out as from 8 December 2016.
Please contact your local PwC contact or Evi Geerts, Pieter Deré or Maarten Temmerman for any questions in this respect.