Model Belgian personal income tax return for residents for assessment year 2016 made public
24 April 2016
The model for the personal income tax return for the assessment year 2016 (income year 2015) was published in the Belgian State Gazette on 8 April 2016. The Federal Public Service Finance also announced that the form will be accessible on Tax-on-web as of 26 April 2016. The dead-lines for filing the tax return have not yet been communicated, but they will probably be the same as in previous years: the end of June for the submission of paper returns and midd July for the returns submitted online via Tax-on-web.
New sections have not been assigned, but like the previous years, some codes have been modified. Because of the sixth Belgian state reform and the regionalisation of the taxation with respect to the (sole and own) dwelling , most changes are to be found in box IX (expenses related to (mortgage) loans and individual life insurances related to the acquisition of a (sole and own) dwelling). The changes mostly relate to the fact that the Flemish and the Walloon region, each of which having autonomous regional powers, have different views on the deductibility of the expenses incurred for housing. Considering these changes, the tax benefits depending on where the taxpayer was residing on 1 January of the assessment year.
The Flemish and the Walloon Region have changed the rate of the tax reduction (Flanders and Walloon 40%) and the maximum amount of expenses that can be included in the return (base amount in Flanders: EUR 1,520.00 - base amount Wallonia: EUR 2,290.00), for mortgage loans concluded after 1 January 2015. That is why an additional distinction needs to be made in the section for the regional housing bonus between loans concluded in 2015 and loans concluded before 2015 (i.e. between 2005 and 2014). It should also be mentioned in the return whether the loans had been concluded as of 2006, as only the loans contracted from 2006 can still be considered to increase the maximum amount, based on the number of dependent children.
The consequences of the sixth Belgian State reform can also be noticed in box X. Since last year, the section is split up in regional tax reductions (codes starting with 3 and 4) and federal tax reductions (codes starting with 1 and 2). This year, for simplification purposes, page footnotes were added to box IX in order to indicate for which regions the tax reductions are still applicable. Regarding the tax reduction for service checks, residents of the Flemish and Brussels Capital region have to declare the amount paid (with a limit of EUR 1,400.00). In the Walloon Region, residents must mention the number of service checks because this region has limited the tax reduction based on the number of checks consumed (maximum 150 x EUR 3).
Another important change can be found in box XIV. Last year, as part of the Caiman tax, the taxpayer (or his/her spouse/partner) had already been asked to indicate if he/she is to be considered as the founder and/or (potential) beneficiary of a legal construction, such as a trust or a foundation. Last year, it was sufficient to provide the name of the (potential) founder/beneficiary. This year, the reporting requirement has been significantly expanded. The name, address, number, legal form and the identification number (if any) of the construction must also be provided now. In case of a trust, also the custodian’s name and address should be declared. Finally, it must also be mentioned whether or not the legal construction is actually pursuing an economic activity.
There are also a number of minor changes, such as:
- Box I: the possibility to mention the email address where the Belgian tax authorities can contact the taxpayer;
- From 1 August 2015, the employment bonus for low salaries was increased from 14.40% to 17.81%, with a maximum increase of EUR 235.00. Because this change occurred in the middle of the year, a distinction is made in box IV between the period before and after the 1 August 2015;
- Box X: a new section was added for payments which the taxpayer has made to acquire new shares of small startup companies. The tax reduction generally amounts to 30% of the expenses incurred, except for startup companies that qualify as a micro-entity, in which case the tax reduction amounts to 45%;
- Box XIV: the Flemish and Walloon Regions have eliminated the regional tax reduction for expenses related to the protection against burglary or fire. Residents of the Brussels- Capital Region only can, therefore, still report these expenses in the box X of their tax return;
- Box XIV: there is a new section for taxpayers who have granted a loan to a startup company through a recognised crowdfunding platform. The startup company will be able to pay interest to the lender without having to withhold movable withholding tax, up to a ceiling of EUR 15,000.00.
Should you have questions on this subject or require assistance with personal income tax compliance formalities, please do not hesitate to contact the above mentioned author or another member of the BDO Competence Center Employment Tax and Legal Services: