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.
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.
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.
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.
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.
Former Belgian VAT exemption for ‘independent groups of persons’ was too restrictive
On 20 November 2019, the European Court of Justice (ECJ) ruled in the case of Infohos (C-400/18) that the former version of the Belgian VAT exemption for ‘independent groups of persons’ (hereinafter “IGP”) was against EU law when it denied the application of the exemption to a group that provided services also to non-members. The ECJ’s decision broadens the previous scope of application of this VAT exemption in Belgium and it remains to be seen what the impact will be on the since mid-2016 adjusted scope of the exemption.
CJEU decision in the College Pension Plan of British Columbia case
On November 13, 2019, the Court of Justice of the European Union (CJEU) rendered its decision in the College Pension Plan of British Columbia case (C-641/17) concerning the compatibility with EU law of the German withholding tax on dividends paid to a Canadian pension scheme. The Court ruled that the German legislation constitutes an unjustified restriction to the free movement of capital and noted that the derogation from the prohibition on restrictions to the free movement of capital with non-EU countries (also referred to as the ‘Standstill Clause’) does not apply to the case at hand
EU Mandatory Disclosure Requirements – Update
As previously reported, mandatory disclosure requirements (MDR) for intermediaries and relevant taxpayers entered into force in the European Union on June 25, 2018 and must be implemented by Member States before December 31, 2019, to be applied as of July 1, 2020. Intermediaries are also required to track reportable transactions as of June 25, 2018 and disclose this information to the tax authorities by August 31, 2020.
This sixth Special Edition Euro Tax Flash summarizes the most recent implementation updates of the new rules into Member States’ domestic legislation, as at November 8, 2019.
ECOFIN discusses digital taxation agenda and removes Belize from the tax haven blacklist
Belgian Constitutional Court annuls annual tax on securities accounts
In its decision of 17 October 2019, the Belgian Constitutional Court annuls the annual tax on securities accounts, with effect as of 1 October 2019. This implies that the tax can no longer be levied for future periods. However, taking into account the potential budgetary and administrative implications, the Court also decided that for the taxable periods that have elapsed till 30 September 2019, the tax remains due (case n° 138/2019).