• Federal budget agreement announces new fiscal measures

Federal budget agreement announces new fiscal measures

17 October 2016

The past weekend, the Belgian government presented its federal budget agreement to the Parliament. However, a number of political flashpoints have been temporarily deferred. Although the outlines of a corporate tax reform are almost ready, the government is still investigating the impact of a capital gains tax on shares, and is making a profound analysis of investment incentives for SMEs and starting companies.

A budgetary effort of EUR 3 billion will be made.

Budgetary effort

As in the past, the budgetary effort will comprise again a reorganisation of finances, but also new tax measures will be adopted:

  • The withholding tax rate on income deriving from shares and bonds will increase from 27% to 30%. This implies a doubling of the rate in 6 years’ time. This will only impact natural persons-shareholders residing in Belgium;
  • A more ecologically driven taxation of company cars has also been accepted:
    • Fuel cards will be taxed in the hands of the employer;
    • Employees/company managers will be able to choose between a company car and a mobility budget;
  • The ceiling for the stock exchange tax will double and will be extended to foreign platforms for those who trade through a foreign intermediary;
  • Internal capital gains” will be dealt with more severely. Internal capital gains are realised upon the sale or contribution of shares to other companies one controls;
  • More officials will be hired to intensify the combat against tax and social fraud.

In addition, the government has decided on a structural reform to boost economy, employment and investment. For instance, for e-commerce, additional measures are required to develop and guarantee the competitiveness of businesses and to enforce job creation within the industry.

Measures that will not be adopted

Some measures at discussion have not been adopted:

  • There will be no tax on labour or consumption;
  • VAT rates and excise duties will not increase;
  • There will be no index adjustment;
  • Unemployment pay will not be adjusted.

Contact

We kindly invite you to visit our website regularly to be informed on any update regarding the new tax measures and the upcoming corporate tax reform. Please do not hesitate to contact your regular BDO contact or send an e-mail to [email protected] to discuss the impact of the new measures on your situation.