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.
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.
Intrastat: changes on the dispatch declaration form
As the end of 2018 is near, we would like to draw your attention to an upcoming change for Intrastat that will enter into force as from January 2019.
Belgian VAT treatment of vouchers: too little too late?
Belgium finally issued a draft act on 7 December and a circular letter in the form of FAQ’s on 8 December to implement the VAT Directive 2016/1065 relating to vouchers.
Introduction of new rules on immovable rent on 1 January 2019
On the 25th of October the long expected new law regarding the optional VAT regime for immovable rent was published. Besides the introduction of the new optional regime, the law introduces a mandatory VAT taxation for the short term rent of immovable property.
Tax consolidation: Belgium enters the playing field!
Groups with loss making entities may (significantly) reduce their overall Belgian tax burden and optimize their tax prepayments. As from next year, it will become possible to compensate the current year losses of one company with the profits of another affiliated company.
Indeed, for financial years starting as from 1 January 2019, Belgium introduces a concept of tax consolidation (in the form of tax-deductible group contributions) for corporate taxpayers. As a result, Belgian group companies may be able to pay taxes only on their combined results.
Earning stripping rules applicable 1 year earlier
The government has introduced a draft law before Parliament which brings the implementation of the earning stripping rules forward from 2020 to 2019.
According to the earning stripping rules, the deduction of net interest (i.e. difference between interest paid and interest received, “exceeding borrowing costs”) is limited to the higher of 3 million EUR or 30% of EBITDA.
CFC rules: artificial offshore constructions under increased pressure
As from 2019, Belgian companies will also pay tax on the non-distributed profits of a “controlled foreign company” (CFC) resulting from an artificial construction set up with the main purpose of obtaining a tax advantage.
Minimum remuneration of company directors (individuals) required – sanctions in case of non-compliance
Since 2018, a separate assessment is due by companies paying none or only limited director’s remuneration. This measure wants to prevent that smaller companies, generating a certain level of profits, will reward their company directors by other means than remuneration subject to personal income tax and social security contributions.