EBITDA Interest Limitation Rule: New Circular Letter avoids unintended consequences when obtaining payment holidays
On 5 May 2020, the Belgian tax administration published its Circular Letter 2020/C/62 on specific payment holidays negotiated in the context of the COVID-19 crisis. More in particular, this circular accepts that certain loans will not lose their “grandfathered” status in case specific modifications are negotiated to loan agreements so to bridge temporary payment difficulties.
On 10 December 2019, the draft repair act containing various changes to the 30% EBITDA rule has been withdrawn from the chamber leaving taxpayers in uncertainty on the application of the rule. However on 27 December 2019, a Royal Decree related to the 30% EBITDA rule has been published. The Royal Decree includes some of
The draft bill containing various modifications to article 198/1 BITC 92 (i.e. 30% EBITDA rule), has been removed from the agenda of the Finance Commission. Therefore it is unrealistic that these modifications will be adopted before year-end. The modifications included in the draft bill – and which are hence not adopted – include the allocation of
On 31 January 2019, the Chamber approved the advancement of the implementation date of the new interest limitation rule (30% EBITDA rule). The law will become effective after it is signed by the King and published in the Official Gazette. Concretely, this means that the Belgian 30% EBITDA rule will enter into force retroactively as from