The Belgian federal government has announced a new set of tax measures aiming to balance the federal budget for 2015-2016, including the so-called ‘tax shift’ (shift from taxes on labour to taxes on estate and consumption). Although the drafts of the legal acts implementing these new tax measures are not yet available, the government has already identified the most important tax changes, as outlined hereafter.
These tax changes are to provide the necessary funds to finance the announced decrease of the employer's social security contributions from 33% to 25%. This reduction will be phased, so that the new rate of 25% will be achieved in 2020, i.e. at the end of the current government’s legislature. The government also announced a decrease of the income tax for professionally active individuals.
The specific conditions of application are unclear at this time, and will be the subject of legal acts of which a first draft will be prepared by the Minister of Finance after the summer recess.
Increase of the withholding tax on dividends, interests and royalties from 25% to 27%.
The existing withholding tax rate of 15% on interest on regular savings accounts is however not to be touched. The reduced rate of 15% for dividends granted by SME’s will also remain in place; this reduced rate applies on dividends from new non-preferential shares paid at the earliest in the third year upon a capital contribution in cash. The newly issued shares are to be continuously held in full ownership by the investor having subscribed to the capital contribution.
A company qualifies as a SME to the extent it does not exceed more than one of the following thresholds (on a consolidated basis):
- annual average number of employees: 50
- annual turn-over (excl. VAT): 7,300,000.00 €
- balance sheet total: 3,650,000.00 €
Moreover, a company with an annual average number of employees of more than 100 (on a consolidated basis) is not considered as SME.
A ‘speculation tax’ will be introduced on capital gains realized by private individuals on shares in listed companies sold within 6 months from their acquisition. The government specified that the capital losses on such shares will be deductible from the speculation tax base. The tax should apply at the rate of 25% on the net gains realized as from 2016.
Under the current regime, capital gains on shares (in listed or non-listed companies) realized by private individuals are not taxable unless they are derived from speculative and/or abnormal activities, falling outside the scope of the ‘normal management of one’s own private estate’, in which case the capital gains on shares are taxable at the rate of 33%. Although it has not yet been clarified how the speculation tax will be implemented, it therefore appears that the speculation tax in some cases may result in a tax decrease from 33% to 25% in practice.
This speculation tax will co-exist with the previously announced ‘cayman tax’, which targets income from certain legal constructions (e.g. foreign trusts, foundations) in the hands of Belgian individuals.
The government further announced the following tax increases:
- Increase of excise duties on tobacco, alcohol and diesel;
- Increase of the VAT on electricity from 6% to 21% ;
- Introduction of a ‘ health tax ’ (or 'grease tax’) on certain unhealthy food.
Reform of the Real Estate Investment Fund
The government is contemplating a reform of the existing tax regime of the SIR/GVV (real estate investment fund), in order to improve its competitiveness with similar structures abroad. It is expected that such reform should eventually lead to an increased revenue of registration duties levied on the transfer of Belgian real estate.
New tax regularization regime
As of 2017, a new and permanent regularization regime is to be set up allowing taxpayers to regularize unreported income against payment of a penalty. The applicable penalty rates have however not yet been specified.
Although the previous official regularization procedure was ended by law on 2 January 2014, it remains possible today to regularize non-reported income based on an internal administrative regulation of 2015. Under this existing administrative regime, taxpayers may spontaneously file ‘complementary’ tax returns for non-reported income. Depending on the nature and source of the income (professional, inheritance, dividends etc.) and/or the amount of capital, the applicable tax together with a penalty ranging from 10% to 50% of the taxes due is levied.