On 11 September 2017, the Belgian tax administration published a circular letter on the practical aspects of the amended exit tax provisions, implemented on 8 December 2016 pursuant to the European Union Anti-Tax Avoidance Directive (EU) 2016/1164 (2016).
Companies and individuals which terminate their Belgian undertaking, but remain using the assets of the Belgian undertaking in an undertaking established in the EEA, have a choice to pay the Belgian exit tax immediately or in instalments over a period of 5 years.
The circular letter clarifies that it concerns the remaining income tax due on the latent capital gains on the transferred assets, taking into account all withholding taxes prepayments and other deductible elements.
In order to be able to benefit from a deferred payment of the tax, eligible companies and individuals must explicitly file a request within two months after the tax bill and must yearly complete and file a form listing the transferred assets. Filing the form interrupts the prescription period. In addition, the receiver may, at any time, request business collateral to safeguard actual payment of the exit tax.
The circular letter also lists the situations under which the payment of the exit tax becomes automatically due. This is, for instance, the case when the individual passes away or when the assets have been sold.