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State aid investigation into Belgian excess profit tax rulings

On January 11, 2016 the European Commission announced its final decision (see the European Commission's Press Release) on the state aid investigations into the Belgian so-called "excess profit" tax rulings system. The decision confirms the Commission's preliminary view that the tax system in question constitutes state aid, incompatible with the internal market. As a result, Belgium has to recover the aid from the beneficiaries. It is now open to both Belgium and the companies concerned to appeal the decisions before the General Court (and possibly later the Court of Justice of the European Union (CJEU)).

Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting

More than 100 jurisdictions*, including Belgium, have concluded negotiations on a Multilateral Convention (or ‘multilateral instrument’) that is intended to implement certain tax treaty related aspects of the OECD/G20 Base Erosion and Profit Shifting (BEPS) initiative. The Convention is designed as a quick and effective mechanism to allow governments to bring their treaties into line with these aspects of the BEPS project, instead of renegotiating individual treaties. The OECD anticipates that up to 2000 treaties could be amended in this way.

Draft program law implementing Budget 2017 approved

The federal government has approved a draft program law implementing the Budget 2017. The text has been sent to the Council of State for advice (subject to change). The draft contains the following tax measures: Direct tax Withholding tax: increase from 27 to 30% for movable income paid or attributed as from 1 January 2017 (and from 17 to 20% in case of early distribution ...

The Belgian government has published a Royal Decree introducing the new real estate investment vehicle FIIS/GVBF

The FIIS/GVBF (“Fonds d’investissment immobilier spécialisé”/”Gespecialiseerd vastgoedbeleggingsfonds”) is aimed at real estate investments by institutional/professional investors and has been designed to compete with similar foreign regimes. The vehicle benefits from the same attractive tax regime as the existing Belgian REITs. The legal framework is however more flexible. The ...

Guidelines with respect to the new annual tax on credit institutions have been published

By Law of August 3, 2016, Belgium has introduced a new annual tax on credit institutions replacing the four existing bank levies. The law did however not provide any practical guidelines with respect to the filing of the tax return nor payment instructions. Today, the long-awaited Royal Decree containing these guidelines has been published in the Belgian Official Gazette. The ...

Belgian Fairness Tax partially contrary to European law

Opinion of the Advocate General Advocate General Kokott of the Court of Justice of the European Union (CJEU) has rendered on 17 November 2016 her opinion in the pending case C-68/15 pursuant to which the Belgian fairness tax is partially contrary to European law. According to Advocate General Kokott, the fairness tax breaches article 4 of the Parent-Subsidiary Directive. The ...

European Parliament votes on TAXE 2 Committee recommendations to make corporate taxation fairer and clearer

On July 6, 2016, the European Parliament (EP) voted in plenary session on the report prepared by the Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE2). The report, which was adopted by 514 votes to 68, with 125 abstentions, contains recommendations to make corporate taxation fairer and clearer and to tackle tax evasion and aggressive tax planning.

New list of tax havens for the purpose of the Dividends Received Deduction

As a reminder dividends received from participations in companies that are considered tax havens cannot benefit from DRD.

US: Treasury letter to EC on state aid investigations

U.S. Treasury Secretary Jacob Lew today wrote to President Jean-Claude Juncker of the European Commission concerning the EC state aid investigations.

Commission Package on Common (Consolidated) Corporate Tax Base, hybrid mismatches and dispute resolution

On October 25, 2016 the European Commission published legislative proposals to relaunch its Common Consolidated Corporate Tax Base initiative, as well as new measures to combat hybrid mismatches, including those involving non-EU countries, and to improve the existing procedures to resolve disputes involving double taxation within the EU.