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New VAT Circular for E-commerce

The Belgian Tax Authorities published Circular 2021/C/72 concerning the VAT-treatment of cross-border B2C e-commerce activities (see NL / FR ). The new lengthy Circular of nearly 300 pages implements the new VAT legislation relating to the distance sales of goods and certain cross-border B2C supplies of goods and services, applicable as from 1 July 2021. Accordingly, the Circular is also effective as from 1 July 2021.

Extended Covid-19 VAT measures

The Belgian Parliament adopted the law concerning temporary support measures due to the COVID-19 pandemic on 15 July 2021. The law extends currently applicable COVID-19 tax measures and is generally effective as from 1 July 2021.

Amendments to the VAT exemption for medical and hospital care

The Belgian Parliament adopted new legislation which changes the scope of the VAT exemption for medical and hospital care. The amendments concern two aspects of the exemption: (1) the nature of the exempt activities (i.e. material scope); and (2) the qualification of the service providers (i.e. personal scope). The trigger for the amendments was a judgement of the Belgian Constitutional Court of 5 December 2019 which annulled several provisions of the exemption in article 44 §§ 1, 2 of the VAT Code (VATC). The new legislation will be effective as from 1 January 2022.

Euro Tax Flash Issue 453: G20 Finance Ministers endorse key components of the two pillars. European Commission to act swiftly once global agreement is reached

On July 10, 2021, the G20 Finance Ministers and Central Bank Governors issued a communique following their meeting on July 9 and 10, 2021 in Venice, endorsing the key components of the two Pillars on the reallocation of profits of multinational enterprises and an effective global minimum tax as set out in the statement released by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on July 1. The European Commission subsequently published a list of frequently asked questions on the global agreement, which the Commission sees as complementary to the EU's tax agenda.

OECD/G20 Inclusive Framework Agreement on BEPS 2.0

On July 1, 2021, in an historic agreement, 130 countries approved a statement providing a framework for reform of the international tax rules. These countries are members of the OECD/G20 Inclusive Framework on BEPS (“IF”), comprising 139 countries. The statement sets forth the key terms for an agreement of a two-pillar approach to reforms and calls for a comprehensive agreement by the October 2021 G20 Finance Ministers and Central Bank Governors meeting, with changes coming into effect in 2023. Pillar One of the agreement is a significant departure from the standard international tax rules of the last 100 years, which largely require a physical presence in a country before that country has a right to tax. Pillar Two secures an unprecedented agreement on a global minimum level of taxation which has the effect of stipulating a floor for tax competition amongst jurisdictions. 

Amendments to the Belgian VAT Act are adopted

The Belgian Parliament adopted the law which contains several amendments to the Value Added Tax Act on 28 June 2021. The provisions of the adopted law are in line with those of the proposed draft, as we reported earlier in our news item here. The law is published in the Belgian Official Gazette on 30 June 2021 and will be generally effective as from 10 July 2021. Specific rules ...

Proposed extensions to Covid-19 VAT measures

A draft law concerning temporary support measures due to the COVID-19 pandemic is submitted to the Belgian Parliament (see here). The draft law proposes to extend currently applicable COVID-19 tax measures, including VAT measures. The proposed extensions of the VAT measures are as follows: Reduced VAT rate for mouth masks and hydroalcoholic gels: The reduced VAT rate of 6 pe ...

Belgian tax authorities provide detailed guidance on Belgian asset testing and BTIS determination for funds of funds and beyond

Belgian tax authorities recently published Circular Letter 2021/C/56 (dd. 10 June 2021) – hereafter ‘2021 Circular’. It addresses various important tax issues arising where Belgian private individual investors hold participations in investment funds (‘funds of funds’) that themselves invest in other funds (‘target funds’). The guidance provides confirmation of a number of widely applied market practices, but it contains also genuine refinements and tolerances. Among the prominent elements of the 2021 Circular figures the position that liquidities in a target fund may be left out of consideration for the fund of funds’ asset test if the target fund exclusively invests in other assets than debt-claims. It seems advisable for investment funds to review their Belgian fund tax reporting for correspondence with the positions in the 2021 Circular.

VAT Royal Decree for E-Commerce

The Belgian Tax Authorities published the VAT Royal Decree which partially transposes the relevant EU Directives on E-Commerce and contains also amendments to the requirements for VAT registration via fiscal representatives. The earlier released draft Decree (see our news item) received a positive advice from the Council of State and the final text will be published in the Belg ...

Federal government corrects rules regarding the deduction of foreign losses

The federal government wants to adapt the corporate tax rules regarding the deduction of foreign losses. The changes are part of a draft law that the government has recently submitted to Parliament and that contains a series of tax measures, mostly repair legislation.