The so-called “Super nota” of Bart De Wever’s contained a variety of proposed tax measures that would bring significant changes to the existing tax system. While the Super nota seems currently “in the fridge”, the budgetary situation of the country makes it likely that one or more of the measures in the Super nota will revive in the final government agreement.
Please keep in mind that as political discussions are not final, the proposed measures may be subject to change based on future negotiations. It is also important to mention that it cannot be excluded that, depending on the negotiations, a number of the proposed measures could be implemented as early as assessment year 2025, which corresponds to FY24 for companies with a financial year corresponding to the calendar year.
In our newsflashes of 17 September and 11 October, we discussed what was on the table for PEs and for family businesses. Today we discuss the possible impact for corporations.
What is on the table
These potential tax reforms could impact the corporations:
- The reform proposes to include several measures to make the participation exemption conditions more stringent which may disqualify certain structures from the regime– for some of these proposed changes, some remediating actions may be possible. Not benefitting from the participation exemption would negatively impact the cash upstream capacity.
- Simplification and harmonisation of exemptions, tax reductions, non-deductible expenses which would hopefully lessen the burden for tax compliance
- Suppression of minimal taxable basis in case of adjustments upon tax audits except in cases of bad faith, repeated infractions, fraud etc: this may limit tax cash impacts of historical risks for which protections need to be sought upon an acquisition
- There are discussions around a lowering and harmonisation of (withholding) tax rate for investment income
- (re-)introduction of accelerated deprecations on certain investments which may provide cash benefits
- To enhance financial efficiency and encourage investment within groups, a modification and simplification of the ‘tax consolidation regime’ along with a more flexible application of the interest deduction limitation is being considered.
- Revision and alignment of “cost proper to employer” policies between the tax and social security administrations which may impact your bonus scheme
- Increased taxation of fuel cards which may impact the salary burdens
- Options and warrant schemes: limitations of social security benefits to schemes linked to the employer’s shares. This would not impact any MIP set-up upon a transaction insofar they are vested on company shares, but this may impact your bonus schemes if they are based on investment company shares
This contribution was realised in collaboration with Sarah Van Leynseele, Christophe Rapoye and Marjolein De Jonge.
