Belgium

Details

  • Service: Tax & Legal
  • Type: Business and industry issue
  • Date: 20/12/2011

Budget 2012: First series of tax measures sent to Parliament 

E-Tax Flash
Some of the tax measures (the most urgent ones) on which the Belgian government recently reached an agreement have been sent to Parliament, as amendments to the draft law containing various measures.

We provide hereafter a short overview of these measures.

 

  • Notional interest deduction: as announced, the maximum rate is reduced to 3% (3,5% for SME’s) as from assessment year 2013. In the future, this maximum rate may only be modified by a new law.

 

  • Withholding tax on movable income: interest and dividends paid or attributed as from 1 January 2012 will be subject to a 21% withholding tax rate. However this new rate will not apply to all interest and dividend income:

 

 
  1. The first bracket of interest on regulated savings accounts will remain tax exempt;
  2. Interest on regulated savings accounts exceeding this first bracket, interest on state bonds issued between 24 November 2011 and 2 December 2011 and miscellaneous income of a movable nature will remain subject to a 15% tax rate;
  3. Liquidation gains paid at the occasion of the (partial) liquidation of the company remain subject to a 10% tax rate;
  4. Interest and dividends currently subject to the 25% rate will remain subject to this 25% tax rate.

  • A supplementary contribution of 4% will be due on movable income subject to the 21% rate and for the amount exceeding an annual threshold of EUR 20.000 (indexed). The contribution may be withheld at source or through the tax return. In the latter case, the taxpayer will have to allow the debtor of the income (not only banking institutions) to communicate the appropriate information to a central contact point.  No municipal tax may be levied on the new supplementary contribution. This contribution will apply to income paid or attributed as from 1 January 2012.

 

  • Company cars: as from 1 January 2012, the benefit in kind resulting from the private use of a company car will be determined with a new formula: Catalogue value x CO2 % x 6/7
    The catalogue value corresponds to the price invoiced, options and VAT included, without taking any rebates into account. The basis CO2 coefficient is set at 5,5%. It will be increased to maximum 18% or reduced to 4% minimum when the CO2 emission of the car is higher or lower than 95 g/km (diesel vehicles) or 115 g/km (vehicles on petrol). A minimum benefit of (indexed amount) EUR 1.200 is introduced.
    For individual taxpayers proving the actual amount of their business expenses, the lump sum deduction for commuting expenses (home-work travel), which is set at 0,15 €/km may never exceed the amount of the benefit in kind resulting from the private use of the company car.
    Furthermore, at the level of the company, an amount corresponding to 17% of the benefit in kind will be considered as an extra disallowed expense, for benefits attributed as from 1 January 2012.

 

  •  The tax reductions for expenses borne for works aiming at energy savings and for passive or low energy houses are abolished as from assessment year 2013 (income year 2012). The tax reduction for expenses related to roof insulation is however maintained but reduced to 30% (instead of 40%) and no carry-over to the following years will be possible. The tax reduction will still apply to expenses related to contracts concluded before 28 November 2011 (and not related to roof insulation) provided the works are actually made during 2012. Furthermore, the carry-over of excess reduction of previous assessment years is maintained.

 

  • The standard rate for the lump sum valuation of stock options will be increased from 15 to 18% for options offered as from 1 January 2012.

 

  • A tax is introduced on the conversion of bearer securities into dematerialized or nominative securities. It will amount to 1% for conversions in 2012 and to 2% for conversions in 2013.

 

  • As regards VAT, as from 1 January 2012, the rate applicable on pay TV is increased from 12 to 21%, while the exemption for notaries and bailiffs will be abolished.

 

  • The rates and ceilings of the stock exchange tax will be increased by 30% for transactions made as from 1 January 2012.


 

1Parl. Doc., House of Representatives, Amendments to the draft law containing various measures, 1952/004.

 

 

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received, or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. 

 

Related information

More details on these measures, and on the other tax measures announced but not yet translated into legislative drafts, are to be found in the slides presentation published on www.kpmg.be