Tax treatment of Belgian regulated investment companies
The tax regime of Belgian regulated investment companies would be amended:
- The withholding tax levied on Belgian source dividends paid to Belgian regulated investment companies would, as a rule, constitute the final tax in their hands (no credit/refund would be possible anymore).
- However, by dispensation to this general rule, sub-funds of Belgian regulated investment companies the shareholding of which is only composed of Belgian organisations for financing pensions (OFP) would still benefit from such credit/refund.
As regards pension funds, it is expected that a withholding tax exemption will be provided by a Royal Decree in a later stage.
Capital gains on funds
The 25% withholding tax on capital gains realised by Belgian private individuals upon sale, acquisition of own units or (partial) liquidation of certain accumulating funds is extended to undertaking for collective investment in transferable securities (“UCITS”) without the European passport.
According to the official statement published by the Belgian government on 1 July 2013 (confirmed by the draft legislative text) this new rule would enter into force on 1 July 2013.
Those funds newly in scope would have to proceed to a retrospective computation of their “taxable income per share” – so-called “Belgian TIS” – as from 1 July 2008. Lacking such information, the Belgian TIS would be computed on a lump sum basis (application of 3% interest rate on the debt instruments held by the funds, for the period running from 1 July 2008 to 1 July 2013). It would nevertheless be reduced by the interest in the meantime distributed by the funds (the “TID”).
In the case where the funds or their representatives would not be in a position to provide the necessary information to compute that taxable basis, a tax base “by default” is foreseen, with effect as from 1 July 2008.
The recently increased rate of the Annual tax on credit institutions would, again, increase.
The rates of 0,0965% (applicable for 2013) and 0,0925% (applicable as from 2014) enacted by the Act of 17 June 2013 would be replaced by 0,1200% and 0,1929% respectively.
Reporting of private legal constructions
The Bill of 8 july 2013 introduces a new reporting requirement for legal constructions set up by private persons.
This new reporting obligation aims at informing the administration of the existence of legal constructions (e.g. trusts, foundations, Partnerships, etc.) and the identity of those involved in it, in their capacity as founder or beneficiary.
This should enable the administration (1) to monitor transfers to-, income generated by- or benefits granted by legal constructions (even if the latter events are currently not taxable), (2) to duly tax such events (when taxable) and (3) to control their reporting in tax returns.
From tax year 2014 onwards, a reporting requirement would thus be established for this purpose, in a similar way as the reporting obligation in force for bank accounts or life insurance contracts abroad.
Entry into force: as from tax year 2014.
Additional details on all the various tax measures recently announced (Fairness Tax, etc.) are provided on our website www.taxreform.be.