2023-07-21 13:33:14
A number of tax measures were adopted under the Vivaldi, most of which have the objective of clarifying certain regimes or facilitating the work of the administration.
Despite the failure of the major tax reform sought by Finance Minister Vincent Van Peteghem (CD&V), a number of measures were nevertheless able to be adopted during this legislature. “The Minister mainly provided responses to the difficulties encountered by the administration“, notes Emmanuel Degrève, founding partner of the Deg & Partners firm, professor at EPHEC and author of the “IPP Manual: theoretical and practical approaches to personal income tax, 2023 edition” (ed. Tax & Management).
He draws up a severe assessment: “We can understand that restorative laws are sometimes necessary, but the activity of the minister should not be limited solely to this. A minister is a political actor before being the butler of his administration.”
Let’s review the ten most significant measures passed in this legislature.
1) Greening of company cars
The tax regime for company cars has been subject to successive changes in order to penalize internal combustion engines and encourage electric motorization. New deductibility criteria have just come into force on July 1st, causing a rush at dealerships in June. “It’s enormously complex, professionals can’t take it anymore“, denounces Emmanuel Degrève. According to him, it would have been enough to calculate for each company a single rate of deductibility for the entire fleet of cars on January 1 of each tax year.
2) New securities account tax
Challenged before the Constitutional Court, the tax on securities accounts had to be corrected. The tax rate remained the same (0.15%), but the tax threshold rose from 500,000 to 1 million euros. And the tax no longer targets the taxpayer but the securities account. The scope of the tax has been significantly widened, since it also affects companies, other legal persons and legal structures. “It will bring little to individuals but more to companies. It is therefore not really a taxation of the rich”, according to Emmanuel Degrève.
3) Excise reform
At the budget conclave in October 2022, the government decided toincrease excise duties on gas and electricity, to (partly) compensate for the permanent 6% VAT. Emmanuel Degrève: “It’s a sham reform, since one tax is replaced by another.”
“Those who are rebellious and well assisted will have access to the copyright regime, the others will not.”
4) Time limit for tax investigation
With the reform of the time limits for investigation and taxation, four time limits will now apply: 3, 4, 6 or 10 years. The investigation period for cross-border situations and complex structures is extended from 7 to 10 years, which has an outcry from practitioners, who see it as yet another administrative hassle and a source of legal uncertainty. At the same time, the claim period has been extended from 6 to 12 months. Emmanuel Degrève: “It’s window dressing. This will only have the effect of lengthening the duration of the administrative litigation, because the tax payment deadline has not been changed and remains two months!”
5) s
Strongly criticized by companies, the new law on copyright taxation has been in force for seven months. Computer scientists were particularly targeted. The new text does not provide for the exclusion of certain professions stricto sensu, but as the administration has still not published a circular, some vagueness remains. “In practice, those who are rebellious and well assisted will have access to the scheme, the others will not”, predicts Emmanuel Degrève.
6) Tax on multinationals
The tax on multinationals should allow Belgium to comply with the European directive which stems from the famous “second pillar” of the OECD. This tax was initially part of the tax reform, before being extracted from the reform and integrated into the budgetary control of March 2023. The tax amounts to 15% of the profits of companies whose turnover exceeds 750 million euros.
7) Regime of impatriates
The special status for foreign executives in Belgium (impatriates) dates back to 1983. It has been replaced since 1 January 2022 by a new regime that is sometimes less advantageous, which applies to new expatriates arriving in Belgium. As for the 24,000 expatriates already present with us, they fall under a two-year transitional regime, which expires on January 1, 2024. The main justification is the revenue shortfall, valued at 34 million euros. For some, the attractiveness of Belgium risks paying the price.
Buildings located abroad belonging to Belgian taxpayers are now taxed on the basis of their cadastral income.
8) Remuneration in the association
Until now, people who gave their time to associations could receive 500 euros per month (6,000 euros per year indexable) without charges. The collaborative economy and occasional services between citizens were also included in the system. Attacked for a question of inequality, the system was not replaced. Emmanuel Degrève: “However, it was not a bad device, even if there was undoubtedly a way to make it simpler by exempting, for example, a first tranche of 6,000 euros from miscellaneous income.”
9) Second residences abroad
From now on, buildings located abroad belonging to Belgian taxpayers are taxed on the basis of their cadastral income. The fact that this was not the case previously led to under-taxation of property income in Belgium compared to abroad. After a court saga lasting several years which caused a stir, the Minister set up a cadastral income extended to all real estate income wherever it is. “We favored an administrative approach rather than rethinking the system in a modern way. Positive point: the uniformity and the fixed price of the system promote legal certainty”, observes Emmanuel Degrève.
10) Freeze of the indexation of certain tax benefits
Twenty taxpayer-friendly schemes have had their indexation frozen over the 2021-2024 period. This was the case, for example, of the exemption of dividends up to 800 euros. The measure went relatively unnoticed in 2021, especially since there was no inflation at the time. Today inflation is back and the tax advantage automatically loses its value. The same measure of non-indexation was taken with regard to the exempt portion on savings accounts.
Folder | Tax reform in Belgium
> Our special file devoted to the tax reform of Minister Vincent Van Peteghem in Belgium.
The summary
- The ten most significant tax measures adopted during this legislature are aimed primarily at facilitate the work of the administration.
- Certain measures have hit the headlines, such as the taxation of second residences abroad.
- Others passed without making a sound, like the freezing of the indexation of certain tax benefits.
- Practitioners regularly express reservations about the complexity and legal certainty.
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