• PROPOSED LOOK-THROUGH TAX FOR FOREIGN LEGAL ‘CONSTRUCTIONS’

PROPOSED LOOK-THROUGH TAX FOR FOREIGN LEGAL ‘CONSTRUCTIONS’

05 May 2015

From assessment year 2013, Belgian residents have an obligation to report in their personal income tax return any involvement in a so-called legal construction (a trust or low taxed entity). To assess whether there is a legal construction, the Belgian tax authorities have drafted a list of different countries with corresponding entities. With the introduction of this regulation the Belgian tax authorities already announced their intend to establish a so-called “look-through tax”, also referred to as "Cayman tax".

The headlines of this tax are the following:

  • The look-through tax is applicable to revenue of the legal construction since 1 January 2015
  • A new non-exhaustive list of all targeted countries and constructions will be drafted
  • The revenue of legal constructions will be allocated to the Belgian taxpayer and will be taxed according to the nature that the income would have had if he had directly received the income. Mostly this will involve investment income that will be taxed at 25%
  • If the legal construction pays at least 10% tax, the look-through tax will not apply.

Contact

BDO is pleased to assist you with any question regarding this subject. Please do not hesitate to contact your regular BDO contact or send an e-mail to: [email protected]