At the end of January 2013, after one year of Di Rupo I government, not less than seven new tax laws have already been issued, partly to repair the preceding laws, partly to implement new tax rules.
We will not expand on the several measures taken, since they
have already been commented extensively in various contributions
and seminars over the year.
What we intend to do in this newsletter, is to pick up some small
topics from the above laws that can be of interest:
1. As of 2013, ‘large’ companies (i.e.
not being small in the sense of article 15 of the Company Code) are
subject to capital gains tax at a rate of 0,4% on the capital gain
realized on shares that would normally be considered tax exempt
(since held for more than one year and not related to tax heaven
companies). The capital gains realized cannot be offset against the
capital losses on other shares. Furthermore, no prior nor current
tax losses can be offset against the capital gains so realized, so
that the 0,4% tax would be due in any cases.
2. Similar to the above, the companies owning or
leasing company cars put at the free disposal of their personnel,
need (as of tax year 2013, income year 2012) to report as taxable
income 17% of the fringe benefit to be reported for the free use of
the car, without being able to deduct prior or current tax losses.
This means that even companies with (important) tax losses will be
subject to corporate tax!
3. From the VAT side, there are since 2013 new
rules basically allowing a VAT deduction percentage (still with a
maximum of 50%) solely to the extent cars are used for business
purposes. The administration proposes three methods (real business
mileage, lumpsum private mileage, and lumpsum 35% deduction if the
company has 4 vehicles or more). Without entering into details, the
second method seems the most optimal to allow the maximum of
50% VAT recovery provided no or low commuting would be driven with
the car. If a company opts for the third (easy) method, it needs to
have at least 4 company ‘vehicles’ (not specified whether
or not they need to be cars!).
4. New ‘thin cap’ rules entered into
force since July 2012. Companies part of a group or forming a
consortium (reference is made to article 11 of the Company Code)
cannot deduct interest on loans or current accounts if the debts to
group companies exceed 5 times their paid-up capital (end of
accounting year) plus taxed reserves (beginning of accounting
year). Companies in Belgium, part of a group, should
carefully analyze their interco liabilities, since the above rule
is now thoroughly investigated upon tax audits by the tax
administration.
5. Also for group companies, as of 2013 transfer
pricing tax audits will more frequently take place (one expect
twice as much audits as last year!) to investigate intercompany
transactions, since the new government has dedicated more
specialized tax inspectors now in this area, and huge funds for the
Government can be found if TP is not properly set up and
documented.
6. As of 2013, movable income of all kind
(interest, dividends, royalties, income from renting of movable
goods) are subject to a 25% withholding tax. There are some small
exceptions where a 15% or even a 10% rate still applies (interest
on saving deposits, royalties on author rights, liquidation
bonus,…).
7. Finally, interesting to know for the new
concept of article 344 ITC (anti abuse regulation) is that in many
authors’ opinion, the new rule will be difficult to apply,
amongst others due to the fact an ‘active legal action’
is required (e.g. it would not be possible to deny a management
company, since being shareholder of a management company is not an
active legal action), and the proof of another motivation (one is
enough) that is not INCOME tax driven (e.g. in an extreme
assumption, an action avoiding income tax and registration duties
would already imply the anti abuse regulation cannot be applied!)
would be sufficient to fall out of the scope of the new
regulation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.