Stock options and warrants are very popular to grant equity-incentives to staff and Directors in Belgium. This is explained by the attractive Belgian personal income tax (“PIT”) and social security treatment of the benefit in kind (“BIK”) derived from the free grant of stock options and warrants. However, this does not mean that the sky is the limit as can be illustrated by means of 3 cases where the ruling commission refused to sign-off on the attractive tax treatment.
According to the new Belgian company law, it is possible for a BV / SRL to have the Articles of Association stipulate that an existing shareholder may exit the company by “selling” his shares to the company at maximum the net equity value of the shares. This also facilitates the transfer of the company to new shareholders. Please consider the appropriate company law formalities and tax treatment.
Very often, a Belgian or foreign holding company controlling one or more operating companies invoices management fees to those operating companies. The key question thus arises whether these management fees are (fully or partially) tax-deductible? This can be a subjective discussion point upon tax audit or before Court. A recent ruling case, where a “variable management fee” was disallowed as it was considered to be a “debt push down” transaction confirms the controversy of this subject matter.
The secret commission tax is a flat Belgian corporate income tax rate that applies to non-reported business income. Recent Belgian case law sheds an interesting light on under which conditions a secret commission can(not) be taxed twice, i.e. at 100% in the hands of the company and at progressive (max. 50%) Belgian personal income tax (“PIT”) in the hands of the beneficiary.
As of 2020, a new definition of the concept “personal permanent establishment” has entered into force. The new definition is much broader than the previous one in order to treat a maximum number of cases as taxable permanent establishment in Belgium. In particular so-called “principal – commissionaire” cases are envisaged. What has changed?
Following the Corona crisis and the corresponding economic impact, many companies will very likely experience unpaid trade receivables due to so-called “doubtful debtors”. However, a provision for doubtful debtors is not automatically tax-deductible. On 23 March 2020, the Belgian tax authorities published a circular letter confirming that a doubtful debtors provision as a result of the Corona crisis may be tax-exempt. What does this mean?
“Lift the economic curve …”. The Corona virus is not only dangerous for our health, but also has a major impact on businesses. For this reason, the Belgian government offers a number of support measures for businesses that are affected by the Corona virus and the exceptional government measures taken. The main purpose of these measures is to create some financial breathing space in this economically delicate situation.
As of 1 January 2020 the VAT exemption for intra-Community supplies of goods can only be applied if the buyer has communicated a valid VAT number to his supplier, attributed by a Member State other than that in which the transport begins. This has some practical consequences.
As of 1 January 2020, a uniform regulation will apply throughout the EU for the allocation of the transport in case of chain transactions. This will make it easier to determine in which relation the transport takes place and will also eliminate the risk that EU Member States would take a different position regarding the same facts.
Proof of intra-Community transport is essential to justify the VAT exemption for intra-Community supplies. Up to now, each EU Member State applied its own criteria with respect the required proof of transport, which led to insufficient legal security for taxable persons. This will change as of 1 January 2020.