Copyright compensation – Exemption from social security contributions – not only for the future, but action already required by 30 June 2023

A windfall tax on electricity producers was enacted on 16 December 2022 to partly implement an EU-wide emergency intervention to address high energy prices. As a result, a cap on market revenues generated by electricity producers applies between 1 August 2022 and 30 June 2023.

In our news item from December last year, we had already reported on the (at that time preliminary) draft bill that would bring significant changes to the existing VAT compliance and VAT refund processes, as well as to the VAT procedural rules. These changes are also referred to as the so-called “VAT chain” reform. Please see here: Reform of periodic VAT returns (mytaxcompass.be)

The Minister of Finance released a proposal for the first phase of the envisaged large tax reform.  If adopted, the proposed measures will generally apply as from 1 January 2024. The second phase is to be decided by the next government after the general election in 2024.

The proposal aims to shift the tax burden away from labor toward consumption and capital. Additionally, it aims to strengthen the competitiveness of businesses by revamping tax incentives. The proposed measures seem to take into account the observations and recommendations of international institutions, such as the European Commission, OECD and IMF. While the reduction of the tax burden on labor is important because the tax wedge is the highest in the EU for those who earn an average wage, the measures come at a cost for the Belgian budget which needs to be financed. When evaluating this proposal, the Government should be mindful that the compensating measures to finance the budgetary expenditures do not adversely impact the investment climate in Belgium.

 De btw-administratie neemt traditioneel twee gevallen in aanmerking waaronder een verbouwd oud gebouw kan worden gelijkgesteld met een nieuwbouw met het oog op de verkoop onder btw-stelsel. In het eerste geval is er sprake van een nieuwbouw voor btw-doeleinden wanneer de uitgevoerde werken van die aard zijn dat ze een ingrijpende wijziging in de wezenlijke elementen (in zijn aard, zijn structuur en, in voorkomend geval, in zijn bestemming) van het bestaande gebouw tot gevolg hebben en dit ongeacht de kostprijs van de werken. In het tweede geval hanteert de btw-administratie een kwantitatief criterium en aanvaardt zij dat er sprake is van een nieuw gebouw wanneer de kostprijs, exclusief btw, van de werken ten minste 60% bereikt van de verkoopwaarde van het gebouw na de verbouwing.

Comme le reste du monde, l'actuel système de la TVA ne peut pas être à la traîne en matière de modernisation et de numérisation. La Commission européenne a publié à cette fin, le 8 décembre 2022, sa proposition tant attendue : l'initiative « La TVA à l'ère du numérique » ou « ViDA ». Bien que l'accord des vingt-sept États membres de l'Union européenne soit indispensable pour approuver la proposition, la Commission européenne a déjà fixé une première échéance optimiste pour la mise en œuvre de cette proposition au 1^er janvier 2025. Vu ce délai serré, il convient d'approfondir rapidement la proposition.

Following the corporate tax reform of 2017, the application of certain corporate tax deductions is limited to 1.000.000 EUR, increased with 70% of the remaining taxable result exceeding 1.000.000 EUR (system of the “korf/corbeille”). The tax deductions concerned are the notional interest deduction of the year, the dividends-received deduction carry-forward, the innovation income deduction carry-forward, the deduction of the loss carry-forward and the notional interest deduction carry-forward, in that order.

As extensively reported in the media the last couple of weeks, there is new tax legislation upcoming regarding the Belgian copyright regime. This regime has been quite extensively applied the last couple of years resulting in substantially lower tax rates for individuals earning copyright income. But after a lot of debate and with the law being voted in parliament this week, what’s in the scope of this new law, who is in, who is out and how can you prepare your company for the impact?

The Belgian Parliament adopted the law which transposes the new EU obligations of digital platform operators into Belgian legislation in accordance with the seventh amendment to the Directive on administrative cooperation in the field of taxation ( Council Directive (EU) 2021/514 – also referred to as DAC7). The new rules will become effective as from 1 January 2023 (hereafter: Belgian DAC7) and will replace the current Belgian regime for platform operators (hereafter Belgian mini-DAC7).

Companies with an operating loss for FY 2020 and expecting a taxable profit for FY 2022 should, like last year, consider the application of the regime of the reconstruction reserve. Such a reserve must then be recorded in the annual accounts of FY 2022.