The new legislative amendment to the “VVPRbis” regime

On January 21, the Belgian government voted a new amendment to the “VVPRbis” regime.

The regime allows small companies, incorporated as from 1 July 2013, to distribute a dividend at a preferential withholding tax rate of 20% (as from the second accounting year) or 15% (as from the third accounting year).

One of the conditions of this regime is that, on the day of the distribution of the dividend, the subscribed capital is fully paid up. Companies without minimum capital were (previously) excluded from the regime. It was assumed that the shareholder(s) had paid up the entirety of the subscribed capital. Therefore, although from a corporate law point of view, the capital of a limited liability company only had to be paid up to up the amount of 6.200 or 12.400 EUR, depending on whether there were one or two shareholders in the company; from a tax point of view, the capital had to be fully paid up, with a minimum of 18,600 euro, at the time of the payment of the dividend.

The entry into force of the CSA, had changed the deal for the SPRL (now transformed into SRL). Since 1st  May 2019, SRL are no longer required to have a minimum capital. At the same time, the provision excluding companies without minimum capital from the “VVPRbis” regime was removed.

Some SPRL – whose capital had not yet been fully paid up and which were being transformed into a SRL – therefore proceeded to a reduction of their equity capital by cancelling the payment of subscribed but not paid-up capital in order to be able to benefit from the reduced withholding tax rate on distributed dividends without having to receive additional funds from their shareholders.

Unfortunately, the legislator intervened. As a result of this new legislative amendment, the contribution initially subscribed must be fully paid up to the amount historically subscribed in order to benefit from the “VVPRbis” regime. Companies that have reduced their capital by waiving the payment of the contribution are therefore excluded from the “VVPRbis” regime.

However, a transitional regime was put in place for companies having performed a capital reduction between 1st May 2019 and 15th December 2021. These companies will be able to proceed, before 31st  December 2022, to a capital increase, which will have the effect of increasing the amount of paid-up capital up to the amount initially subscribed before the waiving of payment.

These measures will apply to dividends distributed as of January 2022.

If you have any further questions, we invite you to contact us at the following e-mail address: or to contact one of our managers directly, who will provide you with advice tailored to your situation.

Permanent establishment: A key concept in international taxation and VAT

At a time when companies’ activities and mobility are constantly increasing, the notion of permanent establishment often appears to be misunderstood or misrepresented, whether in international tax or VAT matters.

This incomprehension, which is easily excusable, is essentially due to two reasons.

On the one hand, the concept of permanent establishment in direct tax matters is often confused with the concept of permanent establishment in VAT matters.

Although these concepts have a common objective, namely to determine the place of taxation, they have their own scope and, above all, distinct legal bases.

Furthermore, the concept of permanent establishment lacks precision in the various European and national legal frameworks, whether in the European Directives or in the various national tax and VAT codes.

  • In international taxation: The concept of permanent establishment is primarily a connecting factor for taxing profits generated in a given jurisdiction. It is defined in Article 5 of the Model Convention established by the Organization for Economic Co-operation and Development (“OECD”) on which the Double Taxation Conventions are based. As a reminder, the main objective of these conventions is to distribute the taxation power between two jurisdictions when they perform their activities in several territories. The Belgian Income Tax Code (Article 229 CIR92 et seq.) also contains a definition of “Belgian establishment” and refers to foreign companies performing activities on Belgian territory via a fixed place of business, the presence of employees or via the provision of services. The main criteria for assessing the presence of a permanent establishment are fixity, dependence and productivity. For many years, the concept of permanent establishment has been continuously expanded by the OECD through various projects and conventions. The tax authorities of OECD member jurisdictions obviously take account of these developments which – in practice – make activities performed abroad taxable, whereas they were not necessarily taxable before. Examples include the “commissionaire” structure, the independent agent structure and the problem of contract splitting. The concept of permanent establishment is also closely linked to the issue of transfer pricing as it is required to attribute profit to the locally taxable permanent establishment. To this end, the OECD has produced various reports detailing how the attribution of profits should be calculated.
  • In VAT matters: The determination of a permanent establishment remains central for a company. The existence or not of a permanent establishment will determine the place of supply of services, the person liable to pay VAT, the possibility of deducting VAT and the rules on invoicing.
    For this purpose, the real source of useful clarification of the concept of permanent establishment is the case law of the Court of Justice of the European Union. The Court, because of its mission, is confronted with specific cases and applies general principles to concrete cases. According to this case law, a permanent establishment is understood to be an establishment with a sufficient degree of permanence and a sufficient structure in terms of human and technical resources to be able to provide services and/or supplies of goods or to be able to receive and use the services rendered to it. For a company, when these elements are met, there may be the existence of a permanent establishment. This factual situation must be studied in order to correctly understand the VAT obligations that arise from it.

As business leader, you are strongly advised to consider whether your company has a permanent establishment abroad.
– Do your employees visit customers abroad from time to time?
– Do you have a computer server abroad?
– Do you have a subsidiary or a representative office in another country?
– Are your warehouses located in a cross-border area?
– Do you have construction sites abroad?
– Do you have dependent agents abroad who can commit your company to local contracts?

If so, contact the Tax Consult team! Anne Georges (VAT specialist) and Laurie Bourgys (Transfer Pricing specialist) will explain to you how to deal with this matter in order to manage your business in a appropriate manner.

How the OECD guidance on the transfer pricing implications of the COVID-19 pandemic can impact the closing year-end 2021?

This is already the one-year anniversary of the  “Guidance  on  the  transfer  pricing  implications  of  the COVID-19 pandemic” (hereafter “the OECD Guidance”) issued on 18 December 2020.

As a reminder, the OECD Guidance represents  the  consensus  view  of  the  137  member states regarding transfer pricing issues that may arise in the COVID-19 context. Many factors may affect transfer prices and the amount of profits accruing to associated enterprises within a multinational enterprises group. COVID-19 pandemic was definitely one of those factors and led to practical challenges for the application of the arm’s length principle. The Guidance is helpful both for taxpayers and tax administrations[1].

The Guidance provides many clarifying comments on the practical application of the arm’s length principle in four priority issues in a 34 pages document:

  • Comparability analysis;
  • Losses and the allocation of COVID-19 specific costs;
  • Government assistance programs;
  • Advance pricing agreements (APAs) or ruling decisions.

As many enterprises are still in the closing process of reporting period ending on 31 December, we choose to take few examples out of the issues linked to losses and the allocation of costs[2].

There is a conclusive evidence that many MNE groups have incurred losses due to a decrease in demand, inability to obtain products or provide services or as a result of exceptional costs.

Three main issues are pointed out by the OECD:

  1. Allocation of losses between associated parties based on analysis of risks incurred in commercial / financial transactions

 The Guidance states that in determining whether or not a “limited-risk” entity may incur losses, the risks assumed by an entity will be particularly important. The Guidance gives an example, where there is a significant decline in demand due to COVID-19 (e.g. value of sales is insufficient to cover fixed costs), a “limited-risk” distributor (taking flash-title of the goods) that assumes some market risk may at arm’s length earn a loss associated with the playing out of this risk[3]. It’s crucial to keep consistence and coherence between the risk assumed and the loss incurred. Related parties should also consider to renegotiate their intercompany agreements where required.

  1. Allocation of exceptional, non-recurring operating costs arising as a result of COVID-19

The Guidance states that the allocation of operating or exceptional costs would follow risk assumption and how third parties would treat such costs. It should be noted that certain operating costs may not be viewed as exceptional or non-recurring in circumstances where the costs relate to long-term or permanent changes in the manner in which businesses operate[4].

  1. Option to apply force majeure clauses, revoke or otherwise revise intercompany agreements

The Guidance states that force majeure events arising in the context of COVID-19 could be the prohibition of activities by a governmental body, for example, through the enforced closure of retail facilities. Thus, a party may invoke that the extreme circumstances justify the non-performance of a contract and this may be achieved through the playing out of a force majeure clause (if any in the agreement). Tax administrations will also review the agreements and verify whether the transfer pricing outcome is appropriate taken into account the related transaction and circumstances[5].


We remain at your disposal to discuss how to apply those guidance to your particular situations. Those Guidance are bringing opportunities but also challenges and our best advice is to act carefully and document as much as possible any change to related intercompany transaction.

Do not hesitate to contact the person in charge of your file or to mail at for more information.

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[1] It should be regarded as an application of existing guidance under the OECD Transfer pricing guidelines to fact patterns that may arise commonly in connection with the pandemic, but not as an expansion or revision of those guidelines.

[2] See full comments on p. 12-18, OECD Guidance.

[3] See point 40 of the OECD Guidance.

[4] See point 40 : OECD states that certain costs relating to teleworking arrangements may become permanent as a result of the pandemic. If teleworking costs are centrally borne by one entity of the MNE group, it may be appropriate to charge out such expenses to parties that benefit from the underlying product or service to which the expense relates.

[5] See point 55-59 OECD Guidance.

Payments made to so-called “tax havens” – Important update to take into account when preparing tax returns for assessment year 2021!

Principles and legal background

Article 307 §1/2 of the Belgian Income Tax Code (“BITC92”) foresees that taxpayers subject to corporate income tax are obliged to declare, on a 275 F form, all payments which they have made, directly or indirectly, to persons established in a state that:

  1. has been assigned by the OECD Global Forum on Transparency and Exchange of Information, after a thorough assessment of the extent to which the state applied the OECD standard of tax transparency, as a state that does not effectively or substantially applies the said standard. Those “non-compliant” states are listed on the so-called “OECD list”, or;
  2. has been included in a list of states – “Belgian list” – applying no income taxation or a low level of tax (typically a corporate tax levied at a nominal rate lower than 10% or effective tax rate on foreign income is lower than 15%). This Belgian list contains 30 states[1] (article 179 of the Royal Decree implementing the BITC92).

As a reminder, the obligation to declare payments only applies to payments exceeding in total EUR 100.000 per taxable period. It applies to all kind of payments, i.e. payments made in cash, by bank transfer or payments in kind.

Regarding the tax consequences, the article 198 §1, 10° BITC92 foresees that above-mentioned payments are only deductible as business expenses payments provided that they have been declared and, that the taxpayer is able to provide evidence that they have been made in the framework of “real and genuine” transactions and to persons other than artificial constructions.

Points of attention with respect to the OECD list – Administrative position updated

In the circular 2020/C/112 on the temporary COVID-19 measures, tax authorities have specified that jurisdictions having received a “partially compliant” rating from the Global Forum on Transparency and Exchange of Information are also in the scope of the article 307 §1/2 BITC, and not only the “non-compliant” jurisdictions. This has been also confirmed in a parliamentary question on 30 June 2021 by the Minister of Finance.

In practice, the Global Forum of the OECD assess on regular basis the standard of exchange of information on request (so-called “EOIR”) and allocates compliance ratings to its the Forum members (161 jurisdictions).

Four types of ratings can be allocated:

  • Compliant and largely compliant : EOIR is implemented completed or to a large extent;
  • Partially compliant : the EOIR is only partly implemented;
  • Non-compliant : when there are fundamental deficiencies in the implementation of EOIR.

Partially compliant jurisdiction represent around 12% of the rated jurisdictions and non-compliant jurisdiction represent around only 3%. By extending the reporting obligation to partially compliant jurisdictions, tax authorities have then substantially enlarged the scope of targeted jurisdictions.

 Concretely, this means that the OECD list of jurisdictions (non-compliant and partially compliant) to be taken into account is the following: Andorra, Anguilla, Antigua & Barbuda, Austria, Barbados, Botswana, British Virgin Islands, Costa Rica, Curaçao, Cyprus, Dominica, Ghana, Guatemala, Indonesia, Israel, Jamaica, Kazakhstan, Liberia, Panama, Seychelles, Sint-Maarten, Trinidad and Tobago, Turkey, Vanuatu. We strongly advise to proceed to a regular check to the OECD list.

Please note that British Virgin Islands, Anguilla and Vanuatu are also mentioned on the Belgian list.

[1] Abu Dhabi, Ajman, Anguilla; Bahamas, Bahrain, Bermuda, British Virgin Islands, Cayman Islands, Dubai, Fujairah, Guernsey, Jersey, Isle of Man, Marshall Island, Micronesia, Monaco, Montenegro, Nauru, Uzbekistan, Palau, Pitcairn Islands, Ras al Khaimah, Saint-Barthélemy, Sharjah, Somalia, Turkmenistan, Turks-and-Caicos’ Islands, Umm al Quwain, Vanuatu, Wallis-et-Futuna.

The corporate income tax at the third stage of its reform

The law of December 25th, 2017 enacting the corporate income tax reform provides an entry into force of its measures into three phases.

  • Phase n°1 : Measures entering into force as of the tax year 2019 (taxable period starting at the earliest on January 1st, 2018)
  • Phase n°2 : Measures entering into force as of the tax year 2020 (taxable period starting at the earliest on January 1st, 2019)
  • Phase n°3 : Measures entering into force as of the tax year 2021 (taxable period starting at the earliest on January 1st, 2020)

The tax year 2021 (2020 revenues) marks the launch of the third phase of this corporate income tax reform.

All of the phase 3 measures are applicable as of the tax year 2021 for taxable periods starting at the earliest on January 1st, 2020.

  • Corporate income tax rate

The corporate income tax rate continues to decrease from 29% to 25%.

The complementary crisis contribution disappear while going from 2% to 0%.

The SME tax rate remains at 20%.

  • Company cars

The calculation for the tax deductibility of the company cars costs has been modified as follows :

120% – (50% * coefficient * CO2 rate)

The coefficient varies depending on the type of the fuel of the vehicle (1 for diesel, 0,95 for benzine and 0,9 for the CNG).

The minimal deductibility rate is 50%. However, the vehicles with a higher CO2 emission than 200gr/km will only be deductible at 40%.

Another new measure is for the fuel expenses which were previously deductible at 75% no matter which rate of CO2 emission of the car. These expenses will be deductible following the same percentage as determined for the other car expenses.

As the greener vehicles market has been growing fast in the last few years, a distinction must be made among hybrids vehicles :

  • Non-rechargeable hybrids non-rechargeable (which should be considered as « classic » car)
  • Rechargeable hybrids that meet the conditions
  • Rechargeable hybrids that does not meet the conditions and are commonly called « fake hybrids » (which should also be considered as « classic » car)

Regarding the latter category, the Tax Authorities are developing a list of fake hybrids with the corresponding non-hybrids (latest update of February 1st, 2021).

Is considered as « fake hybrids » » :

  • A plug-in hybrid vehicle (rechargeable);
  • With a heat engine and a rechargeable electric battery through an external energy source;
  • Purchased, leased or rented as from January 1st, 2018;
  • Having :
    • Either an electrical battery with an energy capacity of less than 0,5 kWh/100kg of the total weight of the car;
    • Either a CO2 emission of more than 50gr/km;
  • Falling under the flat-rate estimation of the benefit in kind for the personal use of a company car.

However, some of the models as listed in the FPS Finances are vehicle to be considered as hybrids from a tax point of view as they simultaneously meet the following two criteria :

  • An electric battery with an energy capacity of at least 0,5kWh by 100 kg of the total weight of the car, and
  • A CO2 emission of maximum 50gr/km

If the two abovementioned conditions are not met, the CO2 rate of the classic version (equivalent heat engine) must be applied. In case no equivalence exists, a coefficient of 2,5 must be applied to the CO2 rate of the vehicle.

  • Depreciation

The declining depreciation method is abolished.

For SMEs, when acquiring a fixed asset, depreciation must be done on a pro rata basis for the first depreciation period.

These changes are applicable for fixed assets acquired or constituted as from January 1st, 2020.

  • Secret commission

The deduction of the secret commission is abolished as of January 1st, 2021.

  • Administrative fines

All administrative fines must be considered as non-deductible.

  • Interests requalification into dividends

A shareholder or a company director can grant a loan to his company on which interests are claimed.

In order to avoid the requalification of the advance interests as dividends, the conditions and limits as imposed by the legislator must be respected.

Exceeding these limits entails, to the extent of the exceeding, a reclassification of the advance interests as dividends with all the tax consequences that it implies.

These limits concern in one hand the rate applied for the calculation of the interests (article 55 ITC92). The rate varies depending on the type of loan. The distinction is made between interests on non-mortgage loan without definite period (rates applied by the Monetary Financial Institution (MFI)) and all other loans (market rate).

The limit is also applied when, on the other hand, the total amount of interest-bearing advances granted to a company exceeds the taxed reserves of the company at the beginning of the taxable period and the paid-up capital at the end of the taxable period.

  • Release of tax-exempt reserves (temporary measure)

This measure is temporarily applicable during tax years 2021 and 2022.

Subject to a preferential payment of 15%, certain tax-exempted reserves can be converted into taxable reserves.

This rate can be reduced to 10% to the extent that the amount is reinvested during the taxable period in depreciable (in)tangible fixed assets (only if the assets are not intended to serve as reinvestment (deferred capital gains taxation regime).

This system does not apply to all tax-exempted reserves and is only available for reserves existing at the end of the last taxable period closing prior January 1st, 2017.

This taxation will result in a minimum taxable basis on which no tax deduction nor tax attributes could be offset.

  • Loss deduction from a foreign permanent establishment

The amount of losses incurred abroad by a foreign permanent establishment or abroad assets will not be deductible anymore, and even though these losses are not deducted abroad.

In the case the losses are definitive and incurred within the EEA, it will be deductible in Belgium.

A specific anti-abuse rule targets situation in which, within the three years following the deduction of the foreign losses, the Company decides to relaunch its activities abroad, the definitive losses previously deducted in Belgium must be recaptured and included in the taxable basis in Belgium.

Tax Consult follows the news of the new measures taken and applied by the Authorities on a daily basis and is regularly in contact with the (tax) Administration. In case of question, do not hesitate to contact our team at or directly your file manager in order to receive a tailor-made advice adapted to your situation.

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How to optimize your personal tax return?

As the tax return period is fast approaching, we have identified a number of points of attention regarding the optimisation of your tax return :

Regarding service cheques, did you know that in Flanders, Brussels and Wallonia, each taxpayer can deduct a maximum of 1,530€ service cheques. This means that if your husband or wife exceeds this maximum amount, it may be interesting to create an account for your partner;

Mortgage loans taken out from 1 January 2020 (Flanders) or 1 January 2017 (Brussels) for your own home no longer give the right to the housing bonus (deduction of interest and capital repayments). To compensate for this, a reduction in registration duties is provided for;

– We would also point out that if you repay your mortgage loan early, you de facto lose the tax deduction for interest and capital repayments;

– To strengthen your statutory pension, you can rely on the supplementary pension, but you can also take the initiative to build up individual pension savings. Between 2020 and 2023, you may pay a maximum of 990 euros and benefit from a 30% tax break (maximum 297 euros);

The “Tax shelter” for starters is one of the easiest ways to reduce tax liability. In order to help small business start-ups, a tax incentive has been developed for citizens. Citizens can get a tax reduction of 30 % or 45 % of the amount invested in the companies. Thus, for an investment of €20,000 in equity in a start-up company, you enjoy a tax reduction of €9,000 (20,000*45%). This measure is often used, for example, when a married couple decides to create a company, the two partners invest in the company and the only one who does not hold a remunerated mandate (condition for Tax shelter) in the company receives a tax reduction of 30% or 45% of the investment.

For donations, the tax relief increases from 45% to 60%. For tax-deductible donations made in 2020, the tax reduction has been temporarily increased from 45 to 60% (law of 15.07.2020, MB of 23.07.2020). Note that the increase will benefit all donations made in 2020, retroactively. However, in principle, the total amount of tax-deductible donations cannot exceed 10% of the total net income, but this ceiling is raised to 20% for 2020 (Law of 15.07.2020, MB of 23.07.2020), with an absolute maximum of € 397,850 in deductible donations. Is there an automatic right to the tax reduction? No, the beneficiary of your donation must be a legally recognised institution.

– If your salary has changed, it may be advisable to inform your social security fund directly so that the social contributions can be adjusted.

– The system of advance payments is different according to the nature of the taxpayer. We distinguish between natural persons, the self-employed and companies. If you make prepayments, you can receive a bonus. A bonus is a tax reduction. If you pay enough in advance, you will get a discount on the tax you have to pay. This bonus applies to all individuals who, after deducting withholding taxes and other deductible expenses, still owe tax on their income. For income as a self-employed person or as a company director, you are not entitled to a rebate. You can even get more to pay on taxes if you do not pay enough in advance!

Please do not hesitate to contact our team at or directly your file manager if you have any further questions.

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The double solvability and liquidity test in case of dividend distribution

One of the major news foreseen by the new Belgian Companies and Associations Code (CAC) consists in the suppression of the minimum capital requirement for Private Limited Company (PLC) and Cooperative Companies (CC). One of the role of the previous minimum capital requirement was the protection of the interests of third parties linked to these types of companies.

Following the suppression of this minimum capital requirement, and in order to protect the financial interest of third parties, the CAC has introduced the obligation for the PLC and CC to perform a double liquidity and solvability test prior to any distribution to the shareholders (i.e. dividend, directors fees, capital reduction, buy-back of own shares – any distribution decided at the closure of the financial year). This double test requirement is applicable for distributions decided as from 1st January 2020.

I. What is the “solvability test”?

Following the solvability test (also known as the “net asset” test), the General Assembly cannot decide to distribute any amount in case the company’s net asset (i.e. total of the assets, minus provisions, debts and, except exceptional cases, the not yet depreciated part of constitution and expansion costs, as well as R&D costs) is negative prior to the distribution or would become negative after the distribution. This test should be based on the latest approved annual accounts or on a more recent financial statement. In case an auditor was nominated, the latter analyses the more recent statement and must join his report to his annual control report.

In the current state of the law, it is not mandatory to insert in the minutes of the General Assembly the quantified result of the solvability test.

II. What is then the “liquidity test”?

Following the result of the liquidity test, a decision to distribute taken by the General Assembly can only produce its effects after the Board of Directors would have demonstrated that, following the distribution, the company could still pay back its debt up to a period of 12 months. It is then the Director’s role to perform a financial analysis (consisting in the demonstration that the company’s short-term debts can be repaid from its current assets – “acid ratio” or “quick ratio”) in order to demonstrate that the liquidity test is fulfilled prior to the General Assembly’s decision to distribute proceeds.

If it can be demonstrated that the Board of Directors knew, or should have known, that the liquidity test would not be fulfilled prior to the distribution, the latter can be held jointly and severally liable towards the company or the third parties of the damages resulting from the decision to still perform the contemplated distribution.

The realization of this double test is phased. Indeed, the General Assembly must first perform the solvability test. In case the test has a negative result, no distribution can be decided upon, despite the potential result of the liquidity test. However, if the solvability test shows a positive result, the Board of Directors must then perform the liquidity test before the actual payment of the distribution.

Tax Consult follows the news of the new measures taken and applied by the Authorities on a daily basis and is regularly in contact with the (tax) Administration. In case of question, do not hesitate to contact our team at or directly your file manager in order to receive a tailor-made advice adapted to your situation.

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Support measure for companies: The Recovery Reserve

In view of the current Covid crisis, many companies have closed their 2020 financial year with an operating loss. In order to help these companies, the Belgian legislator had already proposed several tax measures to support the liquidity and solvency of companies (bill of 5 June 2020 – parliamentary document K551309). This bill aimed in particular to introduce a carry-back of losses (measure in order to support the liquidity of companies by setting off estimated losses for 2020 against profits made in 2019), and the creation of a recovery reserve (a measure to support the solvency of companies). However, the recovery reserve as proposed in this bill was rejected following a negative opinion of the Council of State, as well as an unfavorable vote by parliamentarians in the Finance and Budget Committee

As a consequence, a new and separate bill to introduce a recovery reserve was submitted and approved by the Chamber (Act of 19 November 2020 on the introduction of a recovery reserve for companies published on 1 December 2020).

I. Principle :

Companies may temporarily exempt a part of their profits made in the tax years 2022, 2023 and 2024 (accounting period closed as from December 31, 2021) up to the amount of the losses incurred in 2020 (and with an absolute maximum of 20 million euros) via the constitution of a so-called “Recovery reserve”.  This reserve must be maintained in a separate account of the liabilities (i.e. intangibility condition).

II. Excluded companies :

The law provides that the following companies are explicitly excluded from the regime:

  • Investment companies;
  • Companies which have repurchased their own shares, allocated or distributed dividends or reduced their capital between 12 March 2020 and the date of filing of the tax return relating to the constitution of the above mentioned reserve;
  • Companies holding shares or make payments to companies located in a tax haven.

III. Operations involving taxation of the recovery reserve :

In addition to the exclusions mentioned above, the law also provides that certain operations may imply that all or part of the taxable profit of the taxable period must be taken into account. In order to avoid taxation of this reserve, the company has to preserve “employment”. To do so, the company has to maintain its staff costs at 85 p.c. at least of the staff costs paid in 2019. In case of a decrease below this limit, a part of the exempted reserve will become taxable (in proportion to the excess of this limit). Furthermore, any capital reduction, shares or own shares repurchase or dividend distribution will result in the reserve being partially or totally considered as profit for the taxable period.

Tax Consult follows the new measures taken and applied by the Authorities on a daily basis and is regularly in contact with the (tax) Administration. In case of question, do not hesitate to contact our team at or directly your file manager in order to receive a tailor-made advice adapted to your situation.

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A new annual tax on securities accounts as from February 26, 2021!

Following the annulment of the former tax on securities accounts by the Constitutional Court (judgment of 17 October 2019), a draft law “introducing an annual tax on securities accounts” was submitted to the Chamber early this year. The draft has since been approved at first reading in the chamber committee.

The new annual tax on securities accounts will be levied on the securities accounts themselves and not on the holder of the securities account. A securities account is defined as an account on which financial instruments can be credited and debited.

The new tax will apply to securities accounts held both in Belgium and abroad, when the account holder is a Belgian resident. The tax is not limited to individuals residing in Belgium, but also applies to companies and legal persons (subject to corporate tax) established in Belgium.

The tax is also applicable to securities accounts held by non-Belgian residents (individuals and companies or legal entities) when the securities account is held in Belgium.  However, since the new tax is a wealth tax, Belgian non-residents can avoid the application of the new tax to their Belgian securities accounts if the applicable double tax treaty grants the right to tax the wealth to their jurisdiction of residence (e.g. the Netherlands).

All financial securities and cash balances held in the securities account are covered, including derivatives (such as trackers, turbos, etc.).

The new tax is due when the average value of assets held on the securities account during the reference period exceeds EUR 1,000,000.00. The reference period starts in principle on 1 October and ends on 30 September of the following year. The reference period may be shorter if a securities account is closed or if the account holder moves from Belgium to a state with which Belgium has concluded a double tax treaty, which assigns the right to tax the assets to the state of residence.

The threshold is determined on the basis of the average value of the assets on the securities account at four reference points during the reference period (31 December, 31 March, 30 June and 30 September).

If the securities account is held by a Belgian intermediary, the latter must withhold the tax due and file the return. Belgian intermediaries must fulfil these obligations no later than 20 December (after the end of the reference period ending on 30 September).

In all other cases, it is the account holder’s responsibility to file the return and pay the tax due. If there is more than one account holder, all account holders are jointly and severally liable. Each account holder can file the tax return on behalf of all the account holders.

Do not hesitate to contact the person in charge of your file or to mail at for more information.

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New reporting obligation regarding real estates located abroad for Belgian residents

The Belgian parliament recently approved the bill (Doc.parl., Chambre, 2020-2021, n°55-1762/003)  which enforces the jurisprudence from the European Union’s Court of Justice regarding the taxation of foreign real estate revenues.

In this respect, the taxpayers were differently treated depending their real estate was located in Belgium or abroad. This difference of taxation can be summarized as follow :

  • Regarding real estates located abroad and leased to individuals who are not affecting even partly this building to their professional activity, the taxable base relates to the rents actually collected by the Belgian taxpayer, decreased by 40%. If the real estate is not leased, the “rental value” must be reported as taxable income;
  • Concerning Belgian real estates which are not rented or rented to individuals who are not affecting even partly this building to their professional activity, the taxable base is the indexed cadastral income, enhanced by 40%. This indexed cadastral income, even enhanced, represents very often a more advantageous taxable basis compared to the rents actually collected or to the “rental value”.

In order to end to this treatment’s inequality, the Belgian government decided to attribute a cadastral income to the real estates located abroad, to the condition that these latter belong to an inhabitant of the kingdom.

How to determine this new cadastral income

The rules which determine the cadastral income applicable to the real estates located abroad will be similar to the rules used to determine the cadastral income which is applicable to the real estates located in Belgium :

  • Regarding buildings, the cadastral revenue equals the “ normal net rental values” of the building on the 1st January 1975 (the “date of reference”) or of an “appropriated plot of reference” ;
  • In absence of this “appropriated plot of reference”, the cadastral revenue will be determined by applying the rate of 5,3% to the normal market value of the plot to the 1st January 1975 ;
  • In absence of reference to determine the normal market value of the plot to the 1st January 1975, it must be referred to the actual normal market value on which a corrective factor, annually reviewed, will be applied. For financial year 2020, this factor will amount to 15,036%.

Real estate’s reporting requirement

In order to apply a cadastral income, the concerned taxpayers have to report every acquisition or disposal of a real estate located abroad to the general administration of patrimonial documentation in the first four months which follow the acquisition or the disposal.

The taxpayers who, to the 31st December 2020, were already owning a real estate located abroad have until the 31st December 2021 to report it.

Finally, it shall be noted that the taxpayers who reported foreign real estate income during tax years 2020 and/or 2021 will receive an invitation from the general administration of the patrimonial documentation in order to provide the required information to the establishment of this cadastral income. The taxpayers will have until the 31st December 2021 to answer to this request from the tax authorities.

Penalties in case of non-respect of the above mentioned obligation

The taxpayers who would not respect this new reporting obligation are exposing themselves to an administrative fine which could amount from EUR 250,00 to EUR 3.000,00.

Tax consequences on behalf of Belgian taxpayers

The foreign real estate income from Belgian taxpayers won’t be the target of a double taxation, provided that a double taxation treaty has been concluded between Belgium and the state where the real estate is located.

However this real estate income will be taken into consideration in the progressivity reserve. This means that the latter income will be taken into consideration to determine the applicable tax rate to the total incomes from the taxpayers.

Every team members in Tax Consult are at your disposal if you wish to obtain our assistance regarding the reporting of your real estates located abroad.

Shall you have other questions, we invite you to contact us to the following mail : or directly send an email to one of our managers who will be pleased to provide you with advice personalized to your situation.

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