An ‘indemnity’ falls outside the scope of VAT if the amount does not qualify as the consideration for the supply of a service or a good. In some situations it can be hard to assess whether or not this is the case. This can in particular give rise to discussion in the context of contractual indemnities.
According to established case law of the European Court of Justice, a holding company is entitled to input VAT deduction on costs related to the acquisition of shares, on the condition that the holding company actively participates in the management of the subsidiary. However to which extent can input VAT on such costs be deducted if a planned takeover ultimately does not take place?
Last year, the European Commission launched a proposal for the ‘definitive’ intra-Community VAT system, focusing on the elimination for the exemption for intra-Community supplies. As the discussions regarding this ‘definitive’ VAT system are still ongoing, four ‘quick fixes’ to the current EU VAT system have been approved.
An earlier ruling decision of the Flemish tax authorities (“VLABEL”) had created some confusion with respect to the application of Flemish capital duties to real estate when the latter is transferred to a private individual being the sole shareholder upon liquidation of the real estate company with the legal form of a EBVBA/SPRLU. According to that ruling decision, 2,5% proportional capital duties were due because the sole shareholder was a co-owner of the property. In its Advice dated 25 July 2018, VLABEL overrules that earlier ruling decision and confirms that no proportional capital is due, regardless whether the shareholder is a co-owner of the property or not.
Pursuant to the Law of 31 July 2017, Belgian inheritance law has been significantly amended. The new legal framework applies to inheritance cases as of 1 September 2018. The Flemish, Walloon and Brussels Regions each define their own succession tax rules. Following a Decree dated 6 July 2018, the Flemish Region has updated its succession tax legislation taking into consideration the new inheritance law legal framework. Hereafter, we will elaborate on some key changes of Flemish succession tax legislation.
Over the last couple of years, there has been a debate in Belgian case law about the valuation of a benefit in kind (“BIK”) stemming from the fact that a company Director enjoys free housing of his Belgian based company. Ultimately, the Court decided against the viewpoint of the Belgian tax authorities who have rested their case. New Belgian tax legislation now comes up with a new valuation method to determine the taxable basis of that BIK
On 18 September 2017, new Belgian anti-money laundering legislation was finalized with entry into force as of 16 October 2017. One of the important elements laid down in this new legislation is that a so-called UBO-register should be completed by the Directors of the “tainted entities”. UBO is short for Ultimate Beneficial Owner. The UBO-register should be duly completed for the first time by 31 March 2019.
On 13 January 2017, the Court of Leuven ruled that a capital increase in the hands of a Belgian based company (“BelCo”) can give rise to a so-called “abnormal or benevolent advantage” being granted by a Belgian based shareholder of BelCo. As a result, this advantage was added to the taxable basis of the latter Belgian shareholder of BelCo. What made the judge come to this conclusion?
As of 2019, Belgian corporate tax legislation will be featured by Controlled Foreign Corporation (“CFC”) legislation. As a result, the Belgian tax authorities will be in a position to submit offshore lowly-taxed income to Belgian corporate income tax if conditions are satisfied. What is this all about?
On 1 January 2019, some fundamental changes regarding the Belgian VAT treatment of immovable rent will enter into force. As immovable rent will no longer be VAT exempt in a number of specific situations, these changes imply new opportunities for input VAT deduction on the related costs and investments. Due to the complex transition rules and the different VAT implications, it is recommended to carefully verify which regime is applicable to your specific situation.