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Corporate tax rate (2019)

Rates (assessment year 2020) (*) A. Standard rate B. Reduced rates if applicable C. Other rates 29,58% 20,40% for SMEs (first €100.000) Capital gains on shares (25,50%), secret commissions tax (102% - 51%) (*) Incl. 2% crisis contribution   Risk Capital Deduction   Ass. year 2018: 0,237% (small companies: 0,737%) Ass. year 2019: 0,746% (small compani ...

VAT deduction for a branch: two tests and potentially numerous proportions to calculate cross-border!

The Court of Justice of the European Union (“CJEU”) rendered its judgement in the long-awaited Morgan Stanley case (C-165/17 of 24 January 2019). It concerns the VAT deduction of costs incurred by a branch and used either for transactions of its head-office abroad (“principal establishment”) or for transactions of both the branch and its head-office. Former case-law of the CJUE had stated that services rendered between branch and head-office cannot be taken into account. They fall outside the VAT scope if the risk associated with the economic activity of the branch remained with the head-office (no endowment capital within the branch, see FCE Bank, C-210/04 of 23 March 2006).

Withholding tax on movable income (2019)

Dividends 30% (*) Redemption proceeds 30% Interest 30% Liquidation proceeds 30% Other movable income 30%     (*) Dividends paid to companies established in Belgium, in the European Union or in a country with which Belgium has a tax treaty benefit from an exemption/reduction of withholding tax, provided certain conditions are met. ...

Personal income tax (2019)

Rates (income year 2019) (1) Income (€) Rate (2)     0 - 13.250,00 25% 13.250,00 - 23.390,00 40% 23.390,00 - 40.480,00 45% more than 40.480,00 50% (1)   Computation of the tax (income year 2019) Standard business deduction   A. Remuneration of employees (€) 30% max. €4.810,00 B. Directors remuneration (€) 3% max ...

New tax treaty with Japan will apply as from 1 January 2020

On 19 January 2019, the Belgium - Japan Income Tax Treaty will enter into force. The treaty will apply, in respect of withholding taxes, as from 1 January 2020 and, in respect of income taxes, to taxable periods starting as from 1 January 2020. The new treaty will replace the Belgium - Japan Income Tax Treaty of 1968, as amended by the 1988 and 2010 protocols.

Euro Tax Flash Issue 392 - AG Opinions on cross-border loss relief

On January 10, 2019, Advocate General (AG) Kokott of the Court of Justice of the European Union (CJEU) rendered Opinions in the Memira (C-607/17) and in the Holmen (C-608/17) cases. Both cases concerned the compatibility with EU law of the Swedish rules on the deductibility of losses from foreign subsidiaries, and the extent to which the ‘Marks & Spencer exception’ applies, i.e. losses are considered final. The AG concluded that in the cases under review, losses cannot be considered as final.

Benefits in kind: uniform calculation for houses and reduced benefit for company cars

Changes have been made to the calculation of the benefit in kind of houses and company cars.

Tax legislation to follow in the tracks of new mobility trends

On 3 December 2018, the Belgian government introduced the draft law of the ‘Mobility Budget’ to the parliament. This new draft legislation allows an employee to hand in or downgrade his company car in exchange for a mobility budget and will normally enter into force as from 1 January 2019.   At the same time, the government introduced another draft law including a few (minor) changes to the ‘Cash for car’ legislation.

New reporting, withholding obligations pending for remuneration granted by foreign parent company

The Belgian government has prepared legislation regarding the introduction of an income tax reporting obligation and a tax withholding obligation for all Belgian employers with respect to remuneration paid or granted by a foreign parent company or affiliate. The reporting obligation would apply for income year 2018.  The tax withholding obligation would follow as from income year 2019.

Belgian immigration update

After a lengthy preparation process, as of 1 January 2019, the Single Permit Directive EC/2011/98 will finally be implemented in Belgium.