CORONA BUSINESS SUPPORT MEASURES

Natalie Bastiaens, Partner |
Jean Santin, Senior Manager |
Stijn Rasschaert, Partner |
Jan Oosterlinck, Partner |

06 July 2021

Businesses experiencing financial difficulties due to the COVID-19 outbreak can apply for various social security and tax support measures. We will be happy to provide you with an overview.

FEDERAL BUSINESS SUPPORT MEASURES

GENERAL

 

SOCIAL LEGAL MEASURES

 

GENERAL TAX MEASURES

  • New  measures aimed at encouraging investment 
    • Exemption from payment of wage withhodling tax (update 18.02.2021) (expired measure)
    • Tax exemption for training courses
    • New tax shelter system COVID-19 (update 18.02.2021)
    • Increase of investment deduction to 25% (update 11.01.2021)
    • Increase of tax deductibility of reception costs to 100%
    • Tax reduction for donations in personal income tax
    • Introduction of the consumer cheque

 

INCOME TAX MEASURES

 

INDIRECT TAX MEASURES

 

BUSINESS SUPPORT MEASURES ANNOUNCED BY THE MINISTERY OF FINANCE AND FEBELFIN (Belgian Financial Sector Federation)

 

The regional governements (Flanders, Walloon and Brussels region) have also issued a range of local business support measures. You will find them on the Dutch/French page of this news article. Upon request, we will be pleased to provide more information in English.

 

FEDERAL MEASURES

 

GENERAL

Flexibility in executing a federal public contract

What?

  • No fines or sanctions will be imposed by federal government in case a federal public contract incurs delays or cannot be executed as a result of the coronavirus.  

 

 

Digital signature of authentic instruments

What?

  • Possibility of granting digital (authentic) power of attorney to a confidant or notarial assistant who can sign the deed
  • No need to go to a notary's office to sign deeds (deed of sale, deed of donation, ...)
  • Granting a power of attorney is free of charge.

 

How?

  • The parties appear before the notary by videoconference
  • The parties identify themselves and sign the deed electronically by means of an electronic identity card or a digital itsme ID; the use of the national register number is permitted for this purpose
  • The notary signs the deed electronically using an electronic identity card
  • The powers of attorney will be attached to the authentic ones. For this purpose, the notary will make a certified copy on paper of this electronically signed power of attorney.

 

 

SOCIAL LEGAL MEASURES

Social security contributions for the self-employed: postponement, reduction or exemption

What?

  • Deferral
    • For all self-employed persons (main profession, secondary profession)
    • For provisional contributions of Q1 and Q2/2021and for regularisation contributions of quarters of 2018 and 2019 due on 31.03.2021 or 30.06.2021
    • Deferral for up to one year
    • Double guarantee
      • Increases are waived at the time of effective payment
      • Preservation of social rights
  • Reduction
    • For all self-employed persons (main profession, secondary profession)
    • Reduction of provisional social contributions for the year 2021
    • Reduction applies if professional income is below the legal thresholds
    • Level of reduction to be determined in consultation with the social insurance fund, on the basis of clarifications made by the self-employed and the specific case (level of reduction in sales/orders, reduction in turnover, etc.)
  • Exemption:
    • For self-employed persons in their main occupation and their assisting spouse (including starters)
    • May be granted in whole or in part
    • May be requested for provisional contributions of Q1 and Q2/2021 and regularisation contributions of quarters of 2018 and 2019 due on 31.03.2021 or 30.06.2021
    • No accrual of pension rights for the quarters for which there is an exemption. This can be regularised later (within 5 years) so that quarters are still eligible for the pension calculation
  • Waiver increases:
    • Provisional social security contributions of Q1 andQ2/2021 will not give rise to increases
    • The same applies to the late payment of regularisation contributions for 2018 and 2019 that are due in the course of Q1 and Q2/2021.

 

How to apply?

  • Application to be submitted to social insurance fund
  • Deferral
    • In order to obtain a deferral for the Q1/2021 contribution, the application must be submitted before 15.03.2021 and for the Q2/2021 the application must be submitted before 15.06.2021
    • Application must contain the following information: surname, forename and domicile, ame and registered office of company, company number, justification of the difficulties encountered by the applicant as a result of the coronavirus (at least a clear declaration on honour)
  • Reduction
    • Application to be submitted to social insurance fund
  • Exemption
  • Recommended to contact social insurance fund to make an application
  • Waiver of increases:
    • Is granted automatically, no request necessary
    • More info: contact your social insurence fund 
    • 02/546 60 19

Information source: Dutch / French

 

 

Bridging right for the self-employed in case of quarantine or child care in 2020

For whom?

  • Full benefit for:
    • Self-employed persons in their main occupation (including helpers, assisting spouses in maxi-status)
    • Self-employed persons in a secondary occupation who are subject to provisional contributions at least equal to the minimum contributions for self-employed persons in their main occupation
    • Self-employed persons in their main occupation equated with a secondary occupation (art. 37 ARS) who owe provisional social security contributions that are at least equal to the minimum contribution of self-employed persons in their main occupation
    • Student self-employed persons who owe provisional social security contributions that are at least equal to the minimum contribution of the self-employed persons in their main occupation
  • Partial benefit for:
    • Self-employed persons in a secondary occupation who owe provisional social security contributions calculated on a reference income between EUR 7,021.29 and EUR 14,042.57
    • Self-employed persons with a main occupation assimilated to a secondary occupation (art. 37 ARS) who are subject to provisional social security contributions calculated on a reference income between EUR 7,021.29 and EUR 7.356,08
    • Student self-employed persons who owe provisional social security contributions calculated on a reference income of between EUR 7,021.29 and EUR 14,042.57
    • Active retired self-employed persons who owe provisional social security contributions calculated on a reference income higher than EUR 7,021.29
  • Requirement: the self-employed person owes social security contributions in Belgium
  • For self-employed persons who are placed in quarantine and who must therefore effectively and completely interrupt their self-employed activity for at least 7 consecutive calendar days. Self-employed persons who can organise their activity from home are not eligible. This situation of force majeure must be demonstrated by means of a quarantine certificate (in their own name or in the name of a person registered at the same address as the self-employed person)
  • Self-employed persons who have to interrupt their self-employed activity completely for at least 7 consecutive calendar days because they have to take care of their child(ren) up to a maximum of 18 years, because the class has to be quarantined or the school/childcare centre has to be closed, because the child is in quarantine or because the child has to attend classes remotely as a result of the corona .This situation of force majeure must be demonstrated by means of a supporting document (decision of the management of the school or decision of the childcare centre)
  • In case of a full benefit, the financial support amounts to a maximum of EUR 1,291.69 without family burden and EUR 1,614.10 with family burden for a duration of at least 28 days. This financial support decreases depending on whether the duration of the quarantine is between 28 and at least 7 days
  • The benefit is granted for the months of January up to and including September 2021.


 How to apply?

  • Application to the social insurance fund, which will provide the application form
  • The application for the months of April, May and June can be done until 31.12.2021
  • More information on the website of Social Security Self-Employed Entrepreneurs (Dutch / French).

 

 

Double COVID-19 bridging right for the self-employed: January - September 2021

For whom?

  • Full benefit for:
    • Self-employed persons in their main occupation (including helpers, assisting spouses in maxi-status)
    • Self-employed persons in a secondary occupation who are subject to provisional contributions at least equal to the minimum contributions for self-employed persons in their main occupation
    • Self-employed persons in their main occupation equated with a secondary occupation (art. 37 ARS) who owe provisional social security contributions that are at least equal to the minimum contribution of self-employed persons in their main occupation
    • Student self-employed persons who owe provisional social security contributions that are at least equal to the minimum contribution of the self-employed persons in their main occupation
  • Partial benefit for:
    • Self-employed persons in a secondary occupation who owe provisional social security contributions calculated on a reference income between EUR 7,021.29 and EUR 14,042.57
    • Self-employed persons with a main occupation assimilated to a secondary occupation (art. 37 ARS) who are subject to provisional social security contributions calculated on a reference income between EUR 7,021.29 and EUR 7.356,08
    • Student self-employed persons who owe provisional social security contributions calculated on a reference income of between EUR 7,021.29 and EUR 14,042.57
    • Active retired self-employed persons who owe provisional social security contributions calculated on a reference income higher than EUR 7,021.29
  • Requirement: the self-employed person owes social security contributions in Belgium
  • Measure applicable for the period 1.01.2021-30.09.2021
  • Self-employed persons who are obliged to interrupt their activities completely as a result of the COVID-19 measures (with the exception of the authorised take-away in restaurants, the authorised click and collect for non-essential shops and the early closing time for night shops). There is no minimum duration of interruption required. 
  • Self-employed persons who are not subject to compulsory closure but whose self-employed activity depends mainly on an independent activity listed in the previous point, provided that the self-employed activity itself is also subject to complete interruption during this period of compulsory closure by the public authorities.
  • Non-essential businesses which are unable to continue their business via an order and collection, delivery or appointment system during the period from 27.03.2021 to 25.04.2021. Non-essential businesses which continue their activities via an order and take-away, delivery or appointment system can make use of the bridging right in the event of a fall in turnover
  • The amount of the financial support is EUR 3,228.20 with family burden and EUR 2,583.38 without family burden in case of full benefit (EUR 1,614.10 and EUR 1,291.69 in case of partial benefit, respectively).

 

 How to apply?

  • Application to the social insurance fund, which will provide the application form
  • The application for the months of April, May and June can be done until 31.12.2021

 

 

Bridging rights in case of decrease in turnover of self-employed persons - January to September 2021

For whom?

  • Full benefit for:
    • Self-employed persons in their main occupation (including helpers, assisting spouses in maxi-status)
    • Self-employed persons in a secondary occupation who are subject to provisional contributions at least equal to the minimum contributions for self-employed persons in their main occupation
    • Self-employed persons in their main occupation equated with a secondary occupation (art. 37 ARS) who owe provisional social security contributions that are at least equal to the minimum contribution of self-employed persons in their main occupation
    • Student self-employed persons who owe provisional social security contributions that are at least equal to the minimum contribution of the self-employed persons in their main occupation
  • Partial benefit for:
    • Self-employed persons in a secondary occupation who owe provisional social security contributions calculated on a reference income between EUR 7,021.29 and EUR 14,042.57
    • Self-employed persons with a main occupation assimilated to a secondary occupation (art. 37 ARS) who are subject to provisional social security contributions calculated on a reference income between EUR 7,021.29 and EUR 7.356,08
    • Student self-employed persons who owe provisional social security contributions calculated on a reference income of between EUR 7,021.29 and EUR 14,042.57
    • Active retired self-employed persons who owe provisional social security contributions calculated on a reference income higher than EUR 7,021.29
  • Requirement: self-employed person owes social security contributions in Belgium and must have effectively paid the provisional contributions due for at least four out of the sixteen quarters preceding the quarter that follows the quarter of the calendar month to which the application relates
  • Self-employed persons with a turnover loss of at least 40% in the calendar month preceding the calendar month for which the benefit is claimed compared to the same calendar month in the reference year 2019. In addition, the self-employed person must be able to justify the link between the loss of turnover and the COVID-19 crisis
  • For the months of January - June 2021
  • The financial assistance amounts to EUR 1,614.10 with family burden and EUR 1,291.69 without burden in case of full benefit (EUR 807.05 and EUR 645.85 respectively in case of partial benefit).

 

How to apply?

  • Application to the social insurance fund, which will provide the application form
  • The application for the months of April, May and June can be done until 31.12.2021

 

 

Bridging right for the self-employed in other situations

What?

  • The classic bridging right to support the self-employed who stop or interrupt their activity:
    • By bankruptcy
    • Due to economic difficulties
    • By forced interruption or cessation of activity by a decision of a third economic operator or by an event having an economic impact which directly and significantly affects the activity. The coronavirus is considered to be an event with economic impact.

 

How to apply?

Application to social insurance fund (Dutch / French).


 

Amicable settlement plan for the payment of NSSO contributions

What?

  • For employers who employ staff and who have difficulties paying the contributions declared by the employer for Q1 and Q2/2021, the annual holiday contributions for the holiday service year 2020 and the corrections of contributions due until 30.09.2021
  • Payment by installments for the social security contributions due for Q1/2020 and Q2/2020 can be requested.

 

How to apply?

  • Completion of an online application form addressed to the NSSO 
  • You will need to explain what the financial impact of the coronavirus is to your company.

Information source: National Social Security Office Dutch/ French

 

 

Exemption overtime for employers in key sectors

What?

  • Voluntary overtime will be increased from 100 hours to 220 hours 
  • For employers in key sectors
  • This measure was already in force for the period from 1.04.2020 to 30.06.2020
  • Measure extended from 1.10.2020 to 31.12.2020 and  from 1.01.2021 to 31.06.2021
  • The remuneration for the 120 additional voluntary overtime hours worked are exempted from overtime pay, social security contributions and withholding tax.

 

 

Temporary unemployment due to force majeure COVID-19 eased procedure

What?

  • For every employer all temporary unemployment resulting from the outbreak of COVID-19 will still be considered as temporary unemployment due to force majeure from 1.10.2020 to 31.09.2021
  • Can be applied in case of:
    • Lack of work due to the COVID-19 crisis
    • Force majeure pursuant to a quarantine measure and the employee is in possession of a quarantine certificate
    • Force majeure as a result of the care of a child due to the closure of a nursery, school or care centre for handicapped persons as a result of a COVID-19 measure and the employee is in possession of a closure certificate due to corona
    • Force majeure as a result of the care of a child being in quarantine
  • In principle, this form of unemployment can only be taken in full days. In the period from 10.05.2021 to 30.06.2021, it is also possible to take half-days of temporary unemployment in the sectors of service vouchers and school transport.

 

How to apply?

  • Simplified formalities for employees and employers
  • For the employer:
    • In ASR scenario 5 (electronic social risk declaration in which the employer states the number of days on which the employee is temporarily unemployed), the employer must declare the temporary unemployment on a monthly basis as "force majeure" (by stating the code "nature of the day" 5.4 and with the reason "coronavirus")
    • Issue of control cards C3.2A not required
    • The employer notifies the employee in an individual or collective manner at the latest on the day prior to the starting date of the (extension) of the suspension. In this notification, the employer states the period to which the notification relates and the days or number of days on which the employee is temporarily unemployed and, if applicable, the days or number of days on which the employee is expected to perform work. The same obligation to provide information shall also apply in the event of an increase in the initial number of days of unemployment or a change from a full-time to a part-time system
    • The employer informs the employee concerned about the possibility of obtaining NEO benefits
    • The employer informs the works council or, failing that, the trade union delegation of the use of this measure
  • For the employee:
    • A one-time and electronic submission of a simplified form C3.2-WERKNEMER-CORONA  (Dutch / French) and the ASR scenario 5 (Dutch / French), which can be used until 30/09/2021 when submitting a benefit claim at the payment office (Union or Hulpkas)
    • No eligibility conditions 
    • Unemployment allowance of 70% of the average capped salary (capped at EUR 2,765.75 per month). The temporarily unemployed worker due to force majeure (reason 'Coronavirus') receives a supplement of EUR 5.63 per day from unemployment office on top the unemployment benefit
  • A reduced 15% payroll tax is due on the payment. This withholding tax is temporarily reduced from 26.75% to 15%, so that the temporarily unemployed have more net pay left over. 

 More information available on the website of the NEO: Dutch / French

 

 

Compensation for employers' costs of temporary unemployment for reasons of force majeure due to the corona virus for annual leave for white-collar workers

What?

  • Employers who employed white-collar workers in Q2 2020 will receive compensation for the employer's cost of assimilated temporary unemployment due to force majeure caused by the corona virus for the annual leave of white-collar workers
  • For each employer of white-collar workers, the NSSO will determine a percentage of the global financing envelope (of a total amount of EUR 93,582,741), which reflects how much the employer concerned has claimed temporary unemployment due to force majeure as a result of the coronavirus during the period until 31.12.2020. This percentage is decisive for the granting of the compensation
  • The compensation will not come into effect until the Q2 2021 at the earliest.
     

How to apply?

  • An employer who is eligible for this financial compensation does not need to submit an application.
  • The NSSO will calculate the amount of the compensation and will deduct it from the social security contributions of Q2/ 2021. Any balance may be carried forward to the following quarters of 2021 in so far as contributions are due.

 

 

Possibility of concluding successive fixed-term employment contracts for workers experiencing temporary unemployment


What?

  • It is possible to conclude successive employment contracts for a fixed period of at least 7 days, without this leading to the conclusion of an employment contract of indefinite duration, if these contracts are concluded by workers who are in temporary unemployment
  • These employment contracts must be concluded with an employer other than the employer with whom the worker is temporarily unemployed
  • Only for employers in the care sector, education and employers operating in establishments and centres responsible for contact tracing in order to limit the spread of the Covid-19 virus
  • From 1.10.2020 to 31.06.2021.

 

 

Supplementary allowance granted by the employer to the NEO contributions for temporary unemployment

What?

  • Supplementary allowance granted by the employer on top of the NEO contributions which an employee receives in case of temporary unemployment due to force majeure for economic reasons
  • Free of social security contributions
  • Conditions:
    • The supplement does not result in the employee receiving a higher 'net amount’ than he would have received if he had worked
    • The 'net' refers to the taxable salary (gross - NSSO)
    • All employees of the same category are treated equally, by compensating up to a certain percentage of the net salary or by paying lump sum to everyone (but respecting the maximum of the employees with the lowest salary)
    • The average salary of the previous months is taken into account in the case of employees with variable pay
    • Only salaries on which social security contributions are due may be taken into account, i.e. no benefits such as meal vouchers.

 

How to apply?

  • Transmit to payroll provider
  • Any supplements granted for March but which are too high can be compensated by reducing the supplements for the following months
  • A payroll tax of 26.75% is due on the payment.

 

 

Suspension notice period during Corona unemployment as of 22 June 2020

What?

  • If the employer terminates the employment contract with a notice period (or has terminated it as of 1.032020), the notice period will be suspended as of 22.06.2020 for periods of temporary unemployment due to force majeure as a result of the Corona measures ('Corona unemployment'). The notice period will therefore be extended by these periods
  • Any notice period that starts as of 1.03.2020, and that has not yet expired, is in scope. Therefore, notice periods already started before this date will not be suspended during periods of Corona unemployment
  • Termination given by the employee will also not be suspended by periods of Corona unemployment, regardless of when the notice period starts.

 

 

Posting of workers to users in certain sectors 

What?

  • An employer may place its permanent employees at the disposal of a user from the care or education sector or operate institutions and centres charged with contact tracing in order to limit the spread of the coronavirus, in derogation from Article 31 of the Act of 24 July 1987 on temporary work, temporary employment and the hiring out of workers for the benefit of users
  • Condition: permanent workers were already employed by the employer before 1.10.2020
  • The conditions and duration of the posting must be laid down in a written document signed by the employer, the user and the employee and must be drawn up before the start of the posting
  • From 1.10.2020 to 31.06.2021.

 

 

Corona parental leave for employees

What?

  • This leave allows employees to reduce their work performance by 1/5 or ½ for their child who has not yet reached the age of 12. From 1 July 2020, single parents and parents of a child with a disability may also take the corona parental leave on a full-time basis, regardless of whether they work full-time or part-time
  • In the period from 01.05.2020 - 30.09.2020
  • The allowance increases to 150% for single-parent families and families with a disabled child
  • Inclusion in a continuous period until the end of the measure, or in months or weeks, whether successive or not
  • Additional leave: the corona parental leave is not taken into account for the determination of the outstanding ordinary parental leave
  • For full-time and part-time employees, provided that the part-time working arrangements amount to at least ¾ of a full-time job
  • For employees who have an employment contract with the employer for at least one month
  • Subject to the employer's agreement
  • Children must not have reached the age of 12 years
  • Also for adoptive and foster parents
  • Possibility of converting the ordinary parental leave or career break already provided for into corona parental leave, with the employer's agreement
  • The (gross) allowance is higher than the allowance for ordinary parental leave (25% more).
     

How to apply?

  • Apply to the employer 3 days in advance by registered letter or the submission of an (electronic) document, the duplicate of which must be signed for receipt (or confirmed electronically) by the employer
  • Apply for an interruption allowance from the NEO (Dutch /French), at the latest 2 months after the start of the corona parental leave.

 

 

Student work during Q4 2020, Q1 and Q2 2021

What?

  • The working hours worked by students during Q4 2020, Q1 and Q2 2021 will not be counted against the quota of 475 hours which can be worked annually by students at a favourable social security rate
  • Only in the care and education sectors.

 

 

Extension of the validity of luncheon vouchers, eco vouchers and sport/culture vouchers following the COVID-19 pandemic

  • The validity period of luncheon, eco and gift vouchers which expire between 1.11.2020 and 31.03.2021 will be extended by an extra 6 months due to the coronapandemic
  • The sports and culture vouchers remain valid until 30.09.2021.

 

 

Postponement of payment of company contribution

What?

  • In principle, companies have to pay an annual contribution before 30 June, the amount of which depends on the balance sheet total
  • In 2020, payment could exceptionally be made until 31.12.2020
  • For 2021 companies again have the time until 31.12.2021 to pay the company contribution
  • In this sense, the social security funds will not, as usual, send the maturity notices in April-May, but only from September onwards.

 

 

Vaccination leave

What?

  • Leave of absence (right to be absent with pay) from 9.04.2021 for employees who are vaccinated against the coronavirus during their working hours. The right is valid until 31.12.2021 and can (if circumstances require) be extended until 30.06.2022
  • The employee has this right during the time needed for the vaccination, this is both the time spent at the vaccination centre and the time needed to travel to and from the place of vaccination.
  • For all employees and employers who are linked by an employment contract, including student and temporary workers. Public sector contractual staff are also covered.

 

How to apply?

  • The employee must inform the employer of his absence as soon as possible, as soon as he knows the time of vaccination. 

 

 

GENERAL TAX MEASURES

New measures aimed at encouraging investment

What?

The act of 15.07.2020 containing various urgent fiscal provisions as a result of the COVID-19 pandemic (CORONA III) provides for a number of additional fiscal measures

  • Exemption from payment of wage withholding tax (expired measure)
    • Exemption amounts to 50% of the difference between the wage withholding tax on for each of the months of June, July and August 2020 on the one hand and the wage withholding tax for the month of May 2020 on the other hand. The withholding tax on the basis of calculation is equal to the withholding tax still to be paid after application of any other exemptions
    • On condition that temporary unemployment for at least 1 employee per day was claimed for an uninterrupted period of 30 calendar days between 12.03.2020 and 31.05.2020. This concerns a period of 30 consecutive days, including weekends and public holidays, unless these days are not working days in the company.
    • Requirements for those who are an employer between 12.03.2020 and 31.12.2020:
      • no repurchase of own shares or capital reduction or grant of dividends; and
      • no link with companies established in a tax haven or payments to such companies (unless they are justified)
  • Tax exemption for training courses:
    • Employees who have been working for at least 6 months and who follow certain training courses during a certain period are entitled to an exemption of 11.75% of the salary (limited to EUR 3,500) of the employee concerned. This measure applies as from 1.01.2021
    • The training must amount to at least 10 days during an uninterrupted period of 30 calendar days. For small companies, this is reduced to 5 days during an uninterrupted period of 75 calendar days.
  • New tax shelter system Covid-19
    • Reduction in personal income tax for the acquisition of new shares of SMEs that suffered a decrease in turnover of at least 30% in the period between 14.03.2020 and 30.04.2020 compared to the same period in 2019 as a result of the corona crisis
    • The SME may not use the capital injections received to pay dividends, capital reductions, repurchase own shares or issue loans
    • Excluded are investment, financing or treasury companies, real estate companies, management companies, listed companies, companies linked to tax havens or companies in difficulty
    • Maximum amount of contribution per company EUR 250,000
    • Cumulation with existing tax shelter systems is possible
    • Tax reduction of 20% and a maximum of EUR 100,000 - any balance can be carried forward to three following taxable periods
    • Shares must be retained for at least 5 years
    • A notice was published in the Belgian Official Gazette establishing the model of attestation No. 281.77 that allows the required evidence to be provided.
  • Increased investment deduction (25%):
    • For fixed assets acquired or created between 2.11.2020 - 31.12.2020 by one-man businesses, liberal professions and small companies
    • The measure is extended to investments made until the end of 2022
    • The investment deduction for investments made from 1.1.2019 - 31.12.2021, that cannot be used for the taxable period in which the investments were made can exceptionally be carried forward to the next two taxable periods and is lost afterwards
  • The tax deductibility of reception costs is increased from 50% to 100% for costs incurred between 8.06.2020 and 31.12.2020
  • Tax reduction for donations in personal income tax:
    • An increase from 10% to 20% of the share of the net income eligible for the tax reduction for donations
    • The tax reduction for donations to approved institutions will be increased from 45% to 60% in  2020  to support NGOs and non-profit organisations whose activities in the public interest have been severely affected by the crisis.
  • Introduction of the consumer cheque
    • The employer can give his employees a cheque with a maximum value of € 10 per cheque and a maximum of € 300 per employee. The employee can use the cheque in the catering industry, but also in the cultural or sports sector, under certain conditions
    • The cheque of € 300 is tax-deductible on the part of the employer and completely exempt from income tax and social security contributions
    • For more information, cf. social legal measures - consumer cheques.

 

INCOME TAX MEASURES

 

Automatic deferred payments legal entities, corporate income, non-resident tax and personal income tax

Legal entities tax, corporate income tax, non-resident tax:

  • Normal period will be automatically extended by two additional months
  • This measure applies for tax settlements established as from 12.03.2020
  • For debts established before 12.03.2020, the taxpayer can benefit from a payment by installments (see below)
  • No late payment interest due.

 

 

Payment by installments tax debts 

What?

  • Request for a payment plan with respect to tax debts for VAT, wage tax, personal income tax, corporate, non-resident and legal entities tax
  • Additional measure on top of the automatic extension as described above
  • For enterprises (private individuals or legal entities), regardless of the sector, which can prove that they are facing difficulties directly resulting from the coronavirus spread (to be demonstrated and subject to additional conditions)
  • Installment plan over 24 months maximum (can be extended to 36 months in exceptional circumstances). Large enterprises can apply for a 50-month installment plan
  • Installment plan can be requested for 'corona debts' (i.e. debts arising from 01/01/2020)
  • Enterprises with structural payment difficulties irrespective of the coronavirus do NOT qualify
  • Exemption of late payment interest
  • Remission of fines due to non-payment
  • Debts may not result from fraud.

 

How to apply?

  • One request per debt, to be filed by 30.09.2021 at the latest
  • Upon receipt of the tax assessment note / payment notice
  • By e-mail or regular mail addressed to the competent tax office: Regional Collection Center responsible for your place of residence (natural persons) or seat of the company (legal persons)
  • Standard form is available
  • Reply within 30 days of request

Information source: Dutch / French

 

 

Postponement of the DAC6 notification obligation

  • Cross-border tax arrangements with a potential risk of tax avoidance that took place between 25.06.2018 and 30.06.2020 initially had to be notified to the Belgian tax authorities by 31.08.2020 at the latest. The Belgian tax authorities will share the information in a European database accessible to all European tax administrations
  • Tax schemes set up as from 1.07.2020 must be reported within 30 days
  • The reporting obligation concerns in the first instance BDO (as an intermediary service provider), but, under certain circumstances, also you as a taxpayer
  • Because of the COVID-19 crisis, an administrative tolerance was granted a 6-month postponement
  • For additional information, we refer to our newsflash 'Obligation to report cross-border tax arrangements as from 1 July 2020'
  • For constructions to be reported during the months of January and February 2021, a postponement until 28 February 2021 applies.

 

 

Eased application of the conditions for exemption of write-downs on trade receivables due to the COVID-19 crisis

What?

  • Circular 2020/C/45 dated 23.3.2020 confirms that the crisis caused by the Covid-19 virus is a special circumstance, justifying the exemption of write-downs on trade receivables on companies that are in arrears with the payment of those receivables as a direct or indirect consequence of the measures taken by the federal government.

 

How to apply?

  • Companies will have to identify and explain any debtor with solvency problems in the annex to the corporate income tax return (non-residents) - form 204.3. The assessment of the loss on a claim will, as usual, have to be done per debt. However, some flexibility may be applied when assessing the collection difficulties for corporate debtors whose turnover has decreased considerably as a result of the restrictive measures imposed by the federal government.

 

 

Tax shelter audiovisual works and performing arts: support measures

What?

  • Act of 29.05.2020 containing various urgent fiscal provisions as a result of the COVID-19 pandemic
  • Under the tax shelter legislation, the producer must incur qualifying production and operating expenses within a certain period of time
  • This period is 24 months for performing arts + animation (audiovisual) and 18 months for audiovisual works
  • Performing arts that are only shown by means of live streaming until 15/12/2020 are eligible for tax shelter financing. Livestreams performed after 15/12/2020 also qualify under certain conditions, i.e. a predefined price should be paid in order to be able to watch the performance
  • The measure applies until 30.06.2021. The federal government has decided to extend this measure until 30.09.2021
  • Both periods are extended by 12 months, i.e.:
    • 36 months (24 months + 12 months) for performing arts + animation (audiovisual)
    • 24 months (18 months + 12 baskets) for audiovisual works.
  • In the aforementioned cases, the tax shelter certificate must be issued by the Federal Public Service Finance no later than 31 December of the fifth year following the year in which the framework agreement is signed
  • The exemption is granted at the latest in the assessment year linked to the fifth taxable period
  • If the investor has not received the certificate at the latest on 31 December of the fifth year following the year in which the framework agreement is signed, the previously exempted profit will be considered as profit of the last taxable period during which the tax shelter certificate could lawfully be delivered
  • The investor must pay the sums to which he has committed himself in performance of the framework agreement within three months of signing it
  • This period may be extended by 3 months, provided that the initial 3-month period expires after 12.03.2020
  • If the investor is still unable to make the deposit after the period extended by 3 months, the previous temporary exemption becomes a taxable profit of the first taxable period ending after that extended period
    • The taxpayer must inform the Tax Shelter cell about this - in this way, all administrative sanctions can be avoided, nor will interest on negligence apply
    • The above may also apply, subject to conditions, if only partial payment of the sums can be made
  • On certain conditions, the work that would be produced can be replaced in the framework agreement by another work, without adverse tax consequences (only one-time change allowed). In addition, a second amendment to the framework agreement can be made in order to identify other eligible work for which the first amendment was made no later than 31 January 2021. The condition is that the new eligible work must be carried out by the same production company
  • Concerning performing arts, a lot of performances have been postponed. However, the expenses made following the performances that were programmed in the month after the Première, but which could not take place, will be taken into account as Belgian production and exploitation expenses in the month after the Première. However, they must be incurred in the extended period referred to above
  • In addition to a postponement of expenditures, there will also be an increase in the maximum exemption and, as a result, an increase in the maximum investment:
    • For companies closing no later than 30 December 2020:
      • maximum exemption: EUR 1,700,000 (instead of EUR 850,000).
      • maximum investment: EUR 477,528 (EUR 1,700,000/356%)
    • For companies closing between 31 December 2020 and 31 December 2021:
      • maximum exemption: EUR 2,000,000 (instead of EUR 1,000,000)
      • maximum investment: 475,059 EUR (EUR 2,000,000/421%).

 

How to apply?

  • In order to benefit from the extension of the deadlines for production and operating expenditures, the producer must demonstrate that the eligible work has suffered direct damage as a result of the measures taken by the Federal Government to combat the coronavirus, i.e. that these measures have prevented him from incurring the necessary expenditure within the 'normal' deadline.
  • In order to benefit from the investor's deferral of payment of the sums, the investor must demonstrate that he has been affected by the measures taken by the federal government in relation to the COVID-19 pandemic:
    • either he did not have the necessary liquidity at his disposal at the end of the initial three-month period
    • or used its liquid assets to rescue and/or restart its activities (which will be evidenced by a significant drop in liquid assets following the expiry of the initial 3-month period).
  • In order to benefit from the wider eligibility as Belgian production and operating expenses incurred within the month following the Première, the production company must demonstrate that the postponement of the performances is due to the federal government's decision to close the auditoria and the other performance arts spaces.

 

 

Tolerance for the new 'EBITDA interest deduction limitation'

  • New EBITDA interest deduction limitation in effect from 1.01.2020 for loans entered into as from 17.06.2016, or loans existing before that date but which have undergone fundamental changes since that date
  • Loans prior to 17.06.2016 are therefore not affected by this interest deduction limitation, unless they have undergone fundamental changes since 17.06.2016
  • The tax authorities have determined that allowing specific payment modalities for loans taken out before 17.06.2016 should not be considered as a fundamental change when:
    • The taxpayer can demonstrate that the payment problems (*) are the result of the crisis caused by Covid-19, and
    • The terms of payment appear in an approved application to a financial institution or are included in a supplementary agreement
  • Consequently, the 'old' interest deduction limitation (thin cap 5:1 rule) will continue to apply to these 'old' loans
  • The specific payment modalities for these 'old' loans must be authorised before 30.06.2020 and remain in force until 31.12.2020 at the latest.

(*) These payment problems, which are the result of a general liquidity and solvency problem, may in particular be reflected in a fall in turnover or activity, temporary or total unemployment among staff or temporary closure as a result of the measures imposed by the Federal Government as part of the fight against Covid-19.

 

 

Carry-back of tax losses - COVID-19 reserve

  • Act of 23.06.2020 on fiscal provisions to promote the liquidity and solvency of undertakings in the context of combating the economic consequences of the COVID-19 pandemic
  • Temporary exemption of all or part of the taxable profit of assessment year 2019 or 2020 (taxable periods ended between 13.03.2019 - 31.07.2020 - i.e. also 31.12.2019), amounting to the tax losses of the next taxable period
    • The exemption is granted by (fiscally) creating a (temporary) tax exempt reserve in the taxable period ending between 13.03.2019 and 31.12.2020
  • Exemption may not exceed the taxable profit of the taxable period (ending between 13.03.2019 and 31.12.2020) with a maximum of EUR 20 Million
    • The initial taxable result (increase in taxable reserves, disallowed expenditures and dividends) should be taken into account, prior to application of the carry-back but after the dividend received deduction and the innovation deduction/patent deduction
  • No requirement for the COVID-19-reserve to be reported and retained in one or more separate equity accounts (‘condition of intangibility’ does not apply), however, a separate form (275 COV) needs to be added to the tax return
  • The exemption will be reversed in the tax return related to the subsequent financial year, corrected for the rate difference (if applicable), to avoid the loss being deducted twice. The tax losses will as such be set off against the taxable profit of 2019, hence the term ‘carry-back’
  • The aim is to match as closely as possible the amount of the estimated tax losses and the actual and final amount of the tax losses
  • Excessive deviation: sanction in the form of a  separate assessment, however, with a tolerance of 10% of the actual losses
  • Not possible in case of a (partial) payment or distribution of equity, such as a dividend distribution (incl. liquidation bonus and liquidation reserve), capital reduction, or purchase of own shares in the period as of 12.03.2020 up to and including the day of submission of the corporate income tax return for the assessment year 2021
  • Exclusion of certain companies, such as investment companies and regulated real estate companies (including participation in or payments to tax havens)
  • There can be no benefit due to the different (lower) corporate income tax rates regarding the years in question (exemption first at a higher rate, then tax at a lower rate) - an adjustment to the taxable base will be made for this
  • Companies that were already in difficulty before the COVID-19 pandemic are also exlcuded
  • There should be no benefit by changing rates over years (exemption first at higher rate, then tax at lower rate) - an adjustment is made for this (see above)

 

Carry-back of tax losses in personal income tax and non-resident income tax (individuals)

  • Act of 23.06.2020 on fiscal provisions to promote the liquidity and solvency of undertakings in the context of combating the economic consequences of the COVID-19 pandemic
  • Part of the profit or gain of income year 2019 (assessment year 2020) may be exempted, amounting to the expected tax losses of 2020
    • Application must be made on a separate form 276 COV (as the personal income tax return form has already been published).
      • The amount of the expected tax loss must be justified
    • Limited to net profit (net gain) of Belgian origin of 2019; the exemption cannot therefore lead to a negative result
  • During the income year 2020 (assessment year 2021), the exemption is reversed in order to avoid the loss being deducted twice
  • If there are no tax losses, or the tax losses are lower than the exempted amount, a tax increase is applied
    • This tax increase depends on the degree of overestimation of the loss: the higher the overestimation, the higher the rate of the tax increase
    • The maximum increase is 18%
    • There is a tolerance of 10% of actual losses
  • Not to be combined with lump-sum taxable bases: the use of such bases should be abandoned if the carry-back is to be applied
  • The tax scheme doesn't apply to undertakings which were already in difficulty before the COVID-19 pandemic
  • This application, together with the COV 276 form, must be submitted to the competent tax authority no later than the last day of the deadline for submission of the income tax return for the assessment year 2020
  • Taxpayers who submit their tax return by electronic means as from 25 August 2020 must use the electronic form to apply for the exemption. However, taxpayers who submitted their tax return before the same date will not be able to use the electronic form, even if they submitted their return electronically. Those who submit their returns on paper cannot use the electronic form either.

 

 

Recovery reserve or reconstruction reserve

  • In the assessment years 2022, 2023 and 2024, a tax exempt reserve ('recovery reserve' or 'reconstruction reserve') can be created, amounting to the accounting loss of 2020
  • Maximum reserve to be established over these 3 years: accounting loss of financial year 2020, with an absolute maximum of EUR 20 million
    • On an annual basis,  the maximum amount of the recovery reserve that can be created cannot exceed the taxable reserved profits of that year
  • This should allow companies to bring their equity as much as possible back to pre-COVID-19 levels
  • The tax exempt reserve must be reported in one or more equity accounts and meet the ‘condition of intangibility’, in order to ensure its (temporary) tax free character
  • Equity must be maintained (no purchase of own shares, capital reduction or dividend payment) + employment level must be maintained
  • There cannot be any links with tax havens (payments, participations in tax haven companies, …)
  • Total or partial reversal – and consequently, taxation of the tax exempt reserve - in case of purchases of own shares, dividend payments, capital decreases or distributions of equity, or in case of a significant decrease (> 15%) in its employment (measured by labour costs)

 

How to apply?

  • Companies can apply the recovery reserve by attaching a form, the model of which must be determined by Royal Decree, to the declaration for the assessment years in which the exemption can be applied.

 

 

Teleworking

  • Possibility of granting a lump sum homeworking allowance (cost proper to the employer) to employees: allowance for all employees who regularly and structurally work from home (i.e. at least 5 working days/month - from 1/3/2021 equivalent of 1 working day/week): up to a maximum of EUR 126.94/month (for March 2020), EUR 129.48/month (from 1.04.2020) and EUR 144.31/month (from 1.04.2021-31.06.2021):
    • Covers costs incurred for using the home office (including rent and possible depreciation): printer and computer equipment, office supplies, utilities such as water, electricity and heating, maintenance, insurance, property tax, ... in the employee's place of residence
    • Not taxable in hands of the employee
    • The employer can deduct the cost as professional expenses
    • Exempted from social security contributions
    • Employer may not already reimburse the costs in any other way
    • Ruling request possible for costs proper to the employer if:
      • the conditions for the lump sum homeworking allowance are not entirely met
      • the employer wants to create a distinction between different job categories
      • the employer wants to reimburse other expenses
  • In addition, the employer may grant its employees an allowance of up to EUR 40/month for the costs of using the following equipment:
    • private internet connection and internet subscription: max. EUR 20/month
    • use of the employee's private pc: max. EUR 20/month
  • The employer can provide its employees with equipment and/or internet or telephone subscription. However, in case of private use: a benefit in kind arises on behalf of the employee:
    • PC: EUR 6/month or EUR 72/year
    • Tablet, mobile phone, smartphone: EUR 3/month or EUR 36/year
    • Telephone plan: EUR 4/month or EUR 48/year
    • Internet connection: EUR 5/month or EUR 60/year
  • Cumulation of the lump-sum office allowance with the reimbursement of the purchase price of office furniture/computer equipment: limitative list

 

 

Cross-border employment: agreements with certain EU Member States on teleworking

What?

  • Employees who work from home as a result of the COVID-19 pandemic remain taxable in the State in which they formerly exercised their professional activity before the outbreak of the crisis
  • This scheme applies from 11.03.2020 as regards Germany, the Netherlands and Luxembourg, and from 14.03.2020 as regards France.
  • The scheme is currently valid for all these Member States, after some extensions, up to 30.09.2021
  • The agreement with the Netherlands still contains some specific provisions
  • The agreement with France does not apply to residents of France who qualify for the speacial tax scheme for frontier workers

 

 

Exemption of allowances granted by communities, regions, provinces and municipalities

What?

  • Act of 29.05.2020 containing various urgent fiscal provisions as a result of the COVID-19 pandemic
  • Allowances received in the context of support measures taken by the regions, communities, provinces and municipalities are exempt from income tax
  • Conditions:
    • It may not be a direct or indirect compensation in exchange for the supply of goods or the provision of services
    • The allowance must explicitly stipulate that this compensation is granted in order to deal with the direct or indirect economic or social consequences of the COVID-19 pandemic
    • The allowance will be paid or granted between 15.03.2020 - 31.12.2020. This measure will be extended until end of 2021
  • With regard to personal income tax: the reimbursements are mentioned on the calculation note attached to the recipient's personal income tax assessment notice
  • Examples: nuisance incentive, compensation premium, ...

 

Exception

  • Circular 2020/C/94 of 8.07.2020 on the tax regime of financial benefits obtained under the COVID-19
  • Not covered by the above exemption scheme
  • The tax scheme depends on the nature of the interrupted activity in the context of which the self-employed person obtained those benefits
  • The tax scheme of those benefits therefore also depends on the category of income to which the income from the interrupted activity of the recipient belongs:
    • profit or income
    • remunerations of employees or company directors
    • remunerations of assisting spouses.

 

 

Reduction of withholding tax on professional income for the temporarily unemployed

What?

  • Workers who become temporarily unemployed as a result of the COVID-19 pandemic can receive an increased NEO compensation until 30.09.2021 (70% of the capped average wage with an absolute maximum of EUR 2,754.76 per month). 
  • A reduced rate of 15% withholding tax will be applied to this unemployment benefit. This measure applies to compensation granted or paid from 1.01.2021 - 30.09.2021 inclusive.

 

 

Tax advantage for rent remission

What?

  • For the months of March, April and May 2021, a tax reduction of 30% on the waived rent (of at least 40%) is granted - subject to conditions - to landlords for tenants who were obliged to close their businesses due to the COVID-19 measures (the tenants must therefore meet a number of conditions). The federal government has decided to extend this measure for the months of June, July, August and September 2021
  • The landlord and tenant may not be related parties
  • This measure applies to personal income tax, corporate income tax and non-resident tax
  • The maximum amount eligible for the tax reduction is EUR 5,000/month. A maximum amount of EUR 45,000/month applies to each landlord
  • The tax reduction is applied in the corporate income tax via a non-refundable tax credit.

 

 

INDIRECT TAX MEASURES

 

Exemption from VAT and import duties for goods needed to combat the effects of the COVID-19 outbreak

What?

  • The import of  goods needed to combat the effects of the COVID-19 outbreak can benefit from an exemption from VAT and import duties
  • An exemption from VAT and import duties is granted for the importation of goods which:
    • are declared for consumption in Belgium by government institutions or charitable or philanthropic organisations approved by the Minister for Finance or by his delegate, and
    • are intended to be used in Belgium for the purpose of combating the COVID-19 virus
  • The exemption was extended until 31.12.2021

 

How to apply?

  • If the institution concerned has not yet been recognised by the AAD&A, prior approval must be applied for
  • An EORI number (necessary for the import of goods into the European Community) will automatically be assigned to the organisations concerned
  • Furthermore, no prior approval from the administration is required. The Single Administrative Document must, however, contain certain entries.

 

 

Reduced VAT rate on the supply, intra-Community acquisition and import of protective equipment

What?

Mouth masks and gels
  • Reduced VAT rate of 6% on the supply, the intra-Community acquisition and the import of the following protective equipment:
    • Mouth masks 
    • Hydro-alcoholic gels.
    • Temporary measure: from 01.01.2021 - 30.06.2021 (an extension of the measure until 30.09.2021 has been announced)
  • For the import of mouth masks and hydro-alcoholic gels, however, the full exemption from VAT and import duties shall prevail until 31/12/2021 (cf. exemption from VAT and import duties of goods imported for the purpose of combating COVID-19).
​Vaccines and in-vitro diagnostics
  • ​Reduced 0% rate on the supply, the intra-Community acquisition and import of COVID-19 vaccines and in vitro diagnostic medical devices against this disease and closely related services
    • Temporary measure: from 01.01.2021 - 31.12.2022
  • ​For the import of vaccines and diagnostic tests, however, the full exemption from VAT and import duties applies until 31/12/2021 (cf. exemption from VAT and import duties for the import of goods for combating COVID-19). Afterwards, the above-mentioned 0% rate applies until 31/12/2022 (unless there will be an extension of the exemption).

 

 

Temporary administrative tolerance VAT deduction for company cars

What?

  • Taxable persons using method 2 for the VAT deduction on company cars (semi fixed deduction) can temporaritly apply the 35% fixed deduction rate (method 3) for 2020
  • The conditions for this deduction are:
    • application of the same method to all motorised means of transport used for transport of persons and/or goods by road
    • only one vehicle per user
    • actual use of the vehicle as an operating tool in the context of the economic activity
  • The condition for keeping method 3 for a period of 4 years is therefore abolished for 2020.

 

 

Temporary reduction in the VAT rate on certain restaurant and catering services

What?

  • Temporarily a 6% VAT rate applies to the serving of non-alcoholic beverages intended for consumption on the premises
  • Applies to restaurant and catering services
  • From 8.05.2021 up to and including 30.09.2020. 
  • Alcoholic beverages are excluded from the regulation and remain subject to 21% VAT:
    • beers with an actual alcoholic strength by volume exceeding 0.5% vol.
    • other beverages of an actual alcoholic strength by volume exceeding 1,2 % vol.
  • If you have a registered cash system, it is highly recommended to adjust the programming as soon as possible. More info (Dutch / French).

 

For whom?

  • All permanent or temporary establishments providing restaurant or catering services.

 

 

Harmonisation of VAT refunds

What is it? 

  • In order to support the liquidity of companies, the threshold amounts for the demand of VAT refund are reduced (and aligned with the threshold amounts for foreign companies)
  • Measure applies from 1.01.2021
  • For start-ups and year end reporting the threshold amounts to EUR 50
  • For periodical reporting enterprises, the threshold amounts to EUR 400
  • Start-ups can claim a refund of the VAT credit every month.

 

 

Reduced late payment interest rates for VAT, customs and excise duties

What?

  • The late payment interest rate will be aligned with the rate of the income tax
  • Measure applies from 1.01.2021
  • Specifically, the rate will fall from 9.6% to 4% (or 8% in certain specific cases) interest on arrears. The rate of moratorium interest decreases from 9.6% to 2%. 
  • In addition, the VAT penalty for late payment will fall from 15% to 10%
  • These measures will apply from the second quarter of 2021.

 

 

Proportional VAT fines decreased

What?

  • The rate of proportional fiscal VAT fines is temporarily decreased from 15% to 10%
  • This measure will enter into force on 01.04.2021 and will apply until 30.09.2021.

 

 

Refund of excise duty on tank beer and beer in kegs

What?

  • A refund of excise duties is granted for tank beer and beer in barrels that was set to consumption, but has become unsaleable due to the compulsory closure of the catering industry
  • The condition is that the beer is actually taken back, destroyed and replaced by beer of the same type and in the same quantity without any further excise duty charge
  • The measure is applicable to all beer consumed in tankers and beer in barrels as from 01/06/2020 until 30/10/2020, which was replaced between 01/04/2021 and 30/09/2021.

 

 

BUSINESS SUPPORT MEASURES ANNOUNCED BY THE FPS FINANCE AND FEBELFIN (Belgian Financial Sector Federation)

 

Charters for deferral of actual credit facilities

Within the framework of the Second Charter following the corona crisis, it is possible to obtain a postponement of payment of certain business loans until 31.06.2021. This means that no capital repayments have to be made. However, the interest remains due. In total, the granted postponement of payment of a business loan, within the framework of the First and Second Charter, may never exceed 9 months.

As the corona crisis continues, under the 'Third Charter' a payment extension beyond the maximum limit of 9 months can be granted provided that the companies/organisations are deemed financially sound. This payment extension is valid until 30.06.2021.

 

Second Charter

Who is eligible?

This measure applies to viable Belgian non-financial businesses and SMEs, self-employed persons, NPOs that meet each of these 4 conditions:

  1. There are payment problems due to the COVID-19 crisis:
    • the turnover or activity has decreased or will decrease
    • there is total or partial recourse to temporary or total unemployment
    • the federal government has ordered the compulsory closure of the company
  2. The company is firmly established in Belgium
  3. The enterprise is viable. This means:
    • that the company was not in arrears with its current credit or with taxes or social security contributions on 1 September 2020
    • that, on 30 September 2020, the company was less than 30 days in arrears with its current credits or with taxes or social security contributions
    • deferrals of payment (e.g. VAT, social security contributions, First Charter) that were granted as corona aid are not considered arrears
  4. The company has fulfilled its contractual credit obligations with all banks during the last 12 months prior to 31 August 2020 and is not undergoing active credit restructuring (payment deferrals under the First Charter are not considered to be a breach of contractual credit obligations).

The following sectors/activities are also eligible:

  • Non-profit organisations, both social profit and other, incl. hospitals
  • Non-financial companies with public shareholdings
  • Intermediaries (agents and brokers) of banks and insurance companies
  • Regulated real estate companies 
  • Holding companies whose main activity is to hold participations in non-financial businesses

 

Excluded

  • Only 'non-financial' businesses are eligible for this measure.

 

Which business loans are eligible?

This deferral of payment can be requested for one of the following business loans:

  • Credits with a fixed repayment plan
  • Cash loans
  • Fixed advances

A postponement of payment can only be requested for credits that were granted before 1.04.2020.

Leasing and factoring are not part of the agreement.

 

Conditions for postponement of payment

Applications for payment deferrals can only be made for future due dates until the end of June 2021. The payment deferrals shall run until 30.06.2021 at the latest. A company or organisation can never in total be granted more than 9 months' postponement of payment of a credit, regardless of whether the postponement was granted under the First Charter or the Second Charter.

Applications for payment deferral must be made in good time and no later than 10 calendar days before the due date of the credit and no later than 31.03.2021.

Postponement of payment can only be obtained for future due dates until the end of June 2021.

After the deferral period has expired, payments resume. The term of the credit will be extended by the period of the payment deferral. In other words, the maturity of a credit will be up to 3 months longer.

No file or administrative fees are charged for taking out a payment extension.

 

Third Charter: payment deferral where the maximum limit of 9 months has been exceeded

Because the COVID-19 crisis continues, it is possible under the Third Charter to grant companies/organisations a longer payment extension of up to 9 months, provided that the companies/organisations are 'financially sound'. This extension is valid until 30.06.2021 and can only be applied for credits that were granted before 1 April 2020. All other conditions - already mentioned with the Second Charter - apply here as well.

 

Definition of an unhealthy enterprise

Only non-healthy enterprises are excluded from this postponement of payment until the end of June 2021. The following companies/organisations are regarded as not being healthy: companies/organisations that had negative equity at the end of 2019 and meet one of the following conditions:

  • The company/organisation was behind in its current credits or in taxes or social security contributions on 1.09.2020 or was more than 30 days behind in its current credits or in taxes or social security contributions on 30 September 2020. Payment delays granted as a COVID-19 support measure are not considered arrears
  • The company/organisation has not met its contractual credit obligations with all banks during the last 12 months preceding 31.08.2020 or has been in active credit restructuring before 31.08.2020
  • The company/organisation made a loss in 2019
  • The company's/organisation's equity capital is negative at the time of application and the company/organisation does not have the means to strengthen the capital in the short term.

 

Conditions for postponement of payment

  • Applications for payment deferral may only be submitted for due dates prior to 30.06.2021. The payment deferrals shall run until 30.06.2021 at the latest
  • Applications for postponement of payment must be made in good time and no later than 10 calendar days before the due date of the credit
  • Postponement of payment can only be obtained for future due dates until 30.06.2021.

 

How to apply?

Entrepreneurs/organisations wishing to make use of this facility are requested to contact their bank not later than 10 calendar days before the expiry date of the credit or for expiry dates prior to 30.06.2021. The bank will request some supporting documents to be able to start the application.

 

 

Bridge loans (> 1 year) under state guarantee

In order to support SMEs with a recovery of more than 12 months, a new guarantee scheme was developed for SME loans with a maturity of more than 12 months up to a maximum of 36 months. This guarantee scheme of EUR 10 billion uses the existing envelope of EUR 50 billion.

 

Who is eligible?

This measure applies to all non-financial SMEs (including self-employed persons without a company).

Only companies established by Belgian residents can benefit from this measure. The SME can be incorporated under Belgian law or as a branch with a permanent establishment in Belgium.

The guaranteed credits are used for the benefit of the Belgian activities of these SMEs. The loans may not be used to a large extent to finance the foreign activities of the debtor (the loan agreement must exclude such use or limit it to 10% of the guaranteed loan; losses on guaranteed loans that do not exclude such use will not be reimbursed).

This guarantee scheme also applies to loans granted to SMEs based in Belgium whose main activity is trading (exporting and importing goods to or from abroad).

 

Unqualifying entities

  • Companies which are the subject of collective insolvency proceedings
  • Companies which have received rescue aid that has not been repaid
  • Firms which have received restructuring aid and are still subject to a restructuring plan
  • Patrimonial companies;
  • Management companies.

 

SME definition

The following European SME definition must be met:

Criteria

Micro

Enterprise

Small

Enterprise

Medium Sized

Enterprise

Employment rate

 < € 10 M  < € 50 M  < € 250 M
Or annual turnover  Maximum € 2 M  Maximum € 10 M  Maximum € 50 M
Or balancesheet total  Maximum € 2 M  Maximum € 10 M  Maximum € 43 M

 

Which business loans?

This guarantee scheme applies to all new additional credits and credit lines, with a maturity of more than 1 year and up to 5 years, that banks provide to non-financial SMEs.

It concerns credits and credit lines granted by banks from 24 July 2020 to June 2021, including credits that are repaid by 30 June 2021.

 

Interest rate & costs for the company

File or administrative costs may be charged.

A distinction should be made depending on whether the term of the guaranteed credit exceeds 36 months or not:

  • For a new additional credit or credit line with a maturity of up to 36 months: the nominal maximum interest rate is 2 % (excluding fee); the fee is 50 basis points with a pro rata term
  • For a new additional credit or line of credit with a maturity of over 36 months and up to five years: the nominal maximum interest rate is 2.5 % (excluding fee); the fee is 100 basis points with a pro rata term
  • Such a fee is mandatory under European state aid rules. The credit institution may also choose to charge an amount of total interest to the client without specifying this fee.

 

How does the guarantee scheme work?

Each bank may allocate a portion of the envelope to new additional loans and credit lines in proportion to its market share of outstanding loans and credit lines (all maturities) to viable non-financial businesses, SMEs, the self-employed and non-profit organisations as at 31 December 2019. Institutions may use up to 20% of the allocated envelope to provide secured lending under this second guarantee scheme.

The creditor must specifically identify the credits he wishes to include in the guarantee scheme when granting a credit. The choice of the guarantee scheme is therefore made at the time of the granting of the credit and with the debtor's agreement.

The guarantee applies to each individual loan, the loss of which is borne by the State to the tune of 80%.

The system is optional for banks (credit institutions under Belgian law and branches of foreign credit institutions) that had more than EUR 20,000 in loans and credit lines outstanding to non-financial businesses, SMEs, the self-employed and non-profit organisations on 31 December 2019.

The latest date for drawing on this state guarantee is 30 June 2025.

 

How to apply?

You can apply to your bank or any credit institution under Belgian law and branches of foreign credit institutions. However, the granting of a credit with state guarantee is not an obligation for the bank, not even for companies that meet the criteria. When granting a new credit, a bank applies its normal risk policy and normal credit policy. It is even obliged, according to the SME Finance Act, to grant the most appropriate credit.

The bank will normally have a 'statement of honour' signed by the company and may request additional documentary evidence.