As of 31 January 2020, the UK has finally left the EU. However, to allow taxpayers to prepare themselves, the UK will still be considered as an EU member state up till 31 December 2020 for Belgian corporate tax and withholding tax purposes. What are the main consequences from a Belgian corporate tax point of view after 2020? Hereafter, we will list some areas for attention that you should be aware of and duly handle from a tax perspective.
As of 2019, the so-called 30% fiscal EBITDA thin cap rule applies in Belgium and replaces the former 5/1 thin cap rule. A Royal Decree of 20 December 2019 has introduced further rules to allow Belgian companies and Belgian permanent establishments to actually apply this rule in practice. What does it mean?
As of 1 May 2019, the new Belgian company legislation entered into force. Some new rules mandatorily entered into force as of 2020, even if your existing BVBA / SPRL did not yet amend its Articles of Association. What should you be aware of?
For many years, capital gains on shares realized by a private individual have been fully tax-free in Belgium. Only when there is speculative intent – which needs to be demonstrated after an in-depth tax analysis – the capital gain is subject to 33% Belgian personal tax. How do other European countries treat realized capital gains on shares for personal tax purposes?
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?