On 30 June 2015, the Finance and Budget Commission approved a draft Program Act now including the so-called Financial Sector Contribution (FSC) by which banks and insurance companies should bear an additional contribution to State revenue (Doc. Parl. 1125/010).
As a reminder, as part of the Belgian government agreement, it was decided that banks and insurance companies should bear an additional contribution to the State revenue, thanks to an amendment to the notional interest deduction regime (NID), taking into account Basel III and Solvency II agreements.
Technically speaking, the FSC aims at considering specific own funds of credit institutions and insurance companies as representing the part of prudential capital on which a reduction of the NID would be charged. This reduction would then be applied following a particular sequence, on the deduction of tax losses carried forward, on the dividend received deduction and on the NID itself, so that each financial company concerned would contribute fairly.
The FSC was nevertheless not included in the initial draft Program Act of 1st June 2015 (Doc. Parl. 1125/001).
In the framework of the parliamentary works, the Minister of Finance stated that the FSC is not intended to ensure budgetary balance but is rather the execution of a first tax shift. He added it is essential that the FSC applies to all financial companies, irrespective of their location (thus including foreign financial companies carrying out activities in Belgium) and that a balanced allocation of the efforts between small and large banks is ensured (Doc. Parl. 1125/009).
