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Earnings stripping rules: draft law clarifying legal framework withdrawn

The recently introduced draft legislation to finalize the implementation of the earnings stripping rules in Belgium (see also our earlier newsflash) has been withdrawn. It is hence unlikely that the Federal Parliament will adopt legislative changes to the base law before year-end.

Consequently, the earnings stripping rules will basically apply as of FY 2019 without the add-ons provided for by the draft legislation.

German Finance Minister issues amended Financial Transaction Tax proposal

On December 9, 2019, the German Finance Minister, Olaf Scholz, issued a revised proposal for a Council Directive regarding the introduction of a common financial transaction tax (FTT) to the participating Member States in the so-called enhanced cooperation procedure (Germany, Austria, Belgium, France, Greece, Italy, Portugal, Slovakia, Slovenia and Spain). The revised proposal includes an optional exemption for pension schemes and a new system for mutualization of the FTT revenues. 

Car taxation and compliance: an uphill ride

Tax is becoming ever more complex. The compliance burden continues to increase. Car taxation is no exception to this trend.

For some years now, the benefit in kind related to a company car must be calculated using a formula which incorporates the catalogue value, CO2-emission, fuel type and age of each individual car separately.

A part of this benefit in kind (17 or 40%, depending on whether the company bears private fuel expenses or not), must be added to the company’s disallowed expenses.

VAT quick fixes 2020 part 2 - Simplified treatment for call-off stock

On 4 December 2018, the Council of the European Union adopted the so-called “VAT quick fixes”. The “VAT quick fixes” aim at simplifying international trade and are to be implemented by the EU Member States by 1 January 2020.

Social security : update

As 2019 comes to an end it is time to look back which relevant changes came across in 2019 in the field of (international) social security. At the same time, we look forward to the opportunities and challenges which will continue in 2020.

VAT quick fixes 2020 part 1 - Simplified proof of intra-Community transport

On 4 December 2018, the Council of the European Union adopted the so-called “VAT quick fixes”. The “VAT quick fixes” aim at simplifying international trade and are to be implemented by the EU Member States by 1 January 2020.

Flexible mobility: update

As from 1/01/2020, the new corporate tax deduction rules for company cars and fuel expenses will enter into force.   In combination with the new WLTP testing norms for vehicles (applicable as from 1/01/2021 for cars registered as from 1 September 2017), these new rules will result in significant additional costs for most companies.   In order to mitigate these costs, changes to the current car policies might be required during 2020.  

Earnings stripping rules: precision of the legal framework expected before year-end

The new regime of interest deduction limitation (earnings stripping rules) is in force since 1 January 2019, but could in practice not yet be applied by Belgian entities due to the lack of certain guidelines (see our earlier newsflash for more information about the new regime).

A new draft law has now been introduced in Parliament to bring some much needed clarification (i) on when a taxpayer is considered to be part of a group, (ii) to fine-tune the calculation of a taxpayer’s EBITDA and (iii) to determine how the threshold of 3 million EUR should be divided among Belgian group members.

Along with a new law, the regime also requires executive measures (in principle via a Royal Decree) in order to define more precisely under what modalities a grandfathered loan is excluded from the earning stripping rules and to describe the costs and revenues which are to be considered as economically equivalent to interest cost and interest income.

Changes to the legal framework for specialized real estate investment funds and regulated real estate companies 

Over the last few years, the Belgian legal framework for regulated real estate companies and specialized real estate investment funds has evolved quite significantly. The law of 2 May 2019 on diverse financial provisions introduced the latest set of reforms. These legislative changes entered into force as from 1 June 2019.

Attention points for prepayments in assessment year 2020 – Impact of Earning Stripping Rules

As the end of 2019 draws near, we would like to focus your attention on the last prepayment date for this year.  This is the last chance for every company in a tax paying position who has not yet made sufficient prepayments to avoid or mitigate a tax increase. For companies with a year-end closing on December 31st the deadline for this last prepayment is December 20th, 2019.