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Relaxation of 2020 – Q3/Q4 advance tax payment rules

Taking into consideration the significant increase to 6,75% of the tax increase when insufficient advance tax payments were made during the financial year, a company’s advance tax payment policy has become much more important than before. However, due to the corona crisis you may be facing a liquidity issue. The good news is that the Belgium Government has relaxed the rules relating to advance tax payments to be made by 10 October and 20 December 2020.

The advance tax payment benefit percentages with respect to advance tax payments made in the 3rd and 4th quarter of 2020 have been increased to respectively 6,75% and 5,25%. Thanks to this measure, the mere fact of delaying your 2020 advance tax payments to Q3 and Q4 should be less harmful than normal for companies being confronted with liquidity issues.

However, companies that have carried-out e.g. a capital decrease, a redemption of own shares or a dividend distribution between 12 March 2020 and the last day of the financial year at hand cannot benefit from this relaxation rule. Needless to say that they are still free to make advance tax payments, be it with application of the standard rules.

The mere fact of making an advance tax payment or not in 2020 may significantly impact your effective corporate tax rate. Every taxpayer should thus duly do his homework to avoid unpleasant surprises when receiving the assessment notice …


Kurt De Haen

E: kurt.dehaen@pkf-vmb.be
T: +32 (0)2 460 09 60

Wouter Brackx

E: wouter.brackx@pkf-vmb.be
T: +32 (0)2 460 09 60