The fairness tax is introduced as a separate taxation in the corporate income tax and is independent of and comes, where applicable, on top of the other taxation(s) in the corporate income tax. This separate taxation is, like the corporate income tax itself, not deductible.
The rate amounts to 5,15 % (5 % to be increased with 3 % crisis surcharge). The tax payer should make tax prepayments, otherwise there will be an increase due to no or insufficient advance tax payments.
In order to calculate the taxable base of the “fairness tax”, three steps are foreseen:
- a. Firstly, the positive result is determined between the gross amount of dividends declared for the taxable period and the final taxable base effectively subject to corporate income tax.
- b. Secondly, this positive result is reduced with the declared dividends origination from previously taxed reserves, reserved until tax year 2014. The LiFo-method is used so that the last taxed reserves are deemed to be distributed the first.
- c. Finally, the link with the reduction of the taxable result through “harmful” tax attributes (i.e. previous tax losses and the NID of the year) is made. The result achieved after the first and second step will hence be multiplied with the portion that is based on the ratio between on the one hand the ‘harmful’ tax attributes and on the other hand, the total tax attributes that have reduced the initial fiscal result (reserves, disallowed expenses, dividends).
The fairness tax also will be due in cases where the parent-subsidiary directive applies (participation of 10% or more).
The separate taxation only applies to large companies according to the criteria of art. 15 of the Companies Code (to be determined on a consolidated basis).
The fairness tax also apply to non-resident companies (i.e. companies with a Belgian permanent establishment) and will be determined in proportion to the dividends declared by the head office and the result of the Belgian establishment in the overall result of the head office.
The fairness tax enters into force as of assessment year 2014. Each change made as of 28 June 2013 to theclosing date of the financial year will be disregarded for the application of this rule.
On July 1, 2013, the program-law of 28 June 2013 has been published in the Official Gazette. As a reminder the main measures introduced by this program law are the following:
- Abolishment of the double use of dividend received deduction and notional interest deduction
- Increase of the withholding tax on liquidation proceeds and introduction of the transitional regime
- A reduced withholding tax on dividends on new registered shares in SME’s
- Increase of the fixed registration duty from 25 to 50 EUR
- Increase of the duty on certain long lease agreements (“erfpachtrecht/droit d’emphythéose” and “opstalrecht/droit de superficie”) from 0,2 % to 2% (0,5% for non-profit associations).