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Law containing stimulus package - CORONA III published

The third law containing urgent tax measures in response to the COVID 19 outbreak has been published in today’s Belgium Official Gazette.

Stimulus package – Corona III

This new law is intended to help companies face the crisis and contains various measures:

 - An exemption of payment of wage withholding tax for employers which have resorted to temporary unemployment for at least 30 days until 31 May 2020: an exemption of 50% of difference in wage withholding tax compared to May 2020 (max 20 MEUR) can be granted in June, July and August 2020.

- Tax reduction for donations in 2020 (personal income tax (PIT)) increase of the rate of the reduction from 45 to 60 % and of the maximum amount from 10 to 20% of the net income.

- For donations of computer to schools the deduction (corporate tax) or reduction (PIT) is extended until 31 December 2020

- Further relaxing of conditions for tax reduction for child care: extension to payments made in 2019 and from 30 June until 31 December 2020 (PIT)

- Exemption and deduction of consumption vouchers. Employers will be able to buy consumption vouchers with certified institutions for a maximum of 300 € per employee until 31/12/2020. The vouchers will be valid until 07/06/2021 in the horeca and cultural sectors and will be fully deductible for the employer and tax-exempt for the employee.

- 100% deduction of reception costs made between 8 June and 31 December 2020.

- Investment deduction: increase of the rate from 8 to 25% for investments between 12 March and 31 December 2020 (only for small companies), carry-forward of unused investment deduction possible for two instead of one year for investments made in 2019.

- Tax reduction (PIT) for acquisition of new shares of small companies of which the turnover dropped by more than 30% between 14 March and 30 April 2020

- Annual insurance tax: extension of payment facilities until the end of the year

- No payment of VAT advance in December 2020

- Extension of VAT exemption for donations of computers to schools from 30 June until 31 December 2020

- Confirmation of the Royal Decree introducing the temporary reduced VAT rate of 6% for restaurant and catering services (excluding alcoholic drinks)

Reconstruction reserve

The Reconstruction reserve has not been approved in the last plenary session before the parliamentary holidays and its discussion, together with the last amendment introduced is delayed until the reopening of Parliament.

For more details on the reconstruction reserve, we refer to our earlier flash.

Carry-back of tax losses

Finally the scope of the loss carry-back has been narrowed to accounting years closing between 13 March 2019 and 31 July 2020 (instead of 31 December 2020). For more details about the loss carry-back, we refer to our earlier flash.

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Jos Goubert

Tax Knowledge Dept.

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