• BUDGET CONTROL MARCH 2013

BUDGET CONTROL MARCH 2013

02 July 2013

The federal budget control of March 2013 points out that Belgium needs to raise EUR 2.8 Million of additional savings and tax revenue.

On 30 March 2013 the federal government reached an agreement on a new budget plan containing a majority of savings initiatives and a minority of new tax increases.

The new fiscal measures, adopted in a Programme law of 28 June 2013 (B.S. 1 July 2013) and aiming to boost the economy on the one hand and to create new fiscal revenue on the other hand, can be summarised as follows:

CHANGES ON WITHHOLDING TAX LEVEL (WHT) 

  • Decrease of the WHT rate on dividends arising from new dividends in SME’s (only applicable to contributions in cash and in case of an uninterrupted possession of the shares):
    • The first two years: 25% WHT;
    • The third year: 20% WHT;
    • From the fourth year onwards: 15% WT, also in case the company transposes into a large enterprise or is being liquidated later on;
  • Increase of the WT rate on liquidation bonuses from 10% to 25% as from 1 October 2014:
    • Principle
    • Transitional measures: new measures regarding capital increase decrease until 1 October 2014 and capital decrease:
      • Incorporation into the paid-in capital of tax reserves: 10% WHT at the moment of incorporation;
      • At the occasion of a later capital decrease, the incorporated reserves are taxed degressively;
    • Anti-abuse measures regarding:
      • The retention requirement
      • Modifications to the existing dividend distribution policy 

CHANGES ON CORPORATE INCOME TAX LEVEL

There will no longer be a possibility to cumulate the dividend received deduction scheme (DRD) on investments with notional interest deduction. The DRD regulation prevails. This implies that investments can only be included in the notional interest deduction calculation base if the conditions for application of the DRD have not been satisfied in respect to the given assessment year.

Date of commencement: from assessment year 2014

CHANGES ON INDIRECT TAX LEVEL 

  • Additional excise duties on tobacco;
    • Date of commencement: 10 days after publication of this Programme Law, i.e. 11 July 2013
  • Registration duties on long lease rights (NL: erfpacht and opstal; FR: emphytéose and superficie) from 0.2% to 2%;
    • Date of commencement: 1 July 2013
  • Increase from EUR 25 to EUR 50 of the fixed registration duties in relation to the registration of certain deeds
    • Date of commencement: 1 July 2013

Many questions on the practical impact of the new measure still remain unanswered. BDO follows the trends and developments in order to give you the very latest available information. We therefore recommend visiting our website regularly to be updated of the most recent developments.