Highlights of the new government’s tax policy statements

On 30 September 2020, after Belgian citizens voted nearly 16-months ago, top party negotiators have reached an agreement for a new federal government.

The agreement’s focus, in these times of corona virus pandemic, is on a solidary, prosperous, sustainable and safe Belgium with, among other things, attention to good health care, a modernized social security and tax system, an increased employment rate and a climate-friendly environment.

In respect of the tax system, the agreement contains the following objectives.

Covid-19

  • In order to strengthen the solvability of companies, they will be allowed to record part of their profits for financial years linked to assessment year 2022, 2023 and 2024, as an exempt “reconstruction reserve”.
  • To stimulate business investments, the increased investment deduction of 25% (for SMEs) will be extended with two additional years (2021 and 2022).

Taxation

  • A broad reformation of the tax system, entailing a reduction of taxes on labour, a broadening of the taxable base, a simplification of the tax system and a gradual shift from alternative rewards to rewards in euros.
  • An honest contribution by people who can carry the heaviest burden, with respect for entrepreneurship.
  • Closing the possibility to avoid registration duties by registration of notary deeds abroad.
  • The communication of balances of Belgian bank accounts to the Central Point of Contact.
  • Emission-free company cars by 2026 and a mobility budget for employees who cannot qualify for a company car.
  • Tax incentives to train and educate employees.
  • The reduced 6% VAT rate for demolition and reconstruction will be made available for all residential buildings.
  • The ending of tax regularization as of 31 December 2023.

International tax developments

  • Supporting the ongoing efforts at OECD and European level to reform international taxation.
  • The introduction of a digital tax as of 2023, preferably based on an international agreement.
  • The implementation of a minimum tax (Pillar Two of BEPS 2.0).

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