Webcast Fairness Tax

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Since the publication of the first drafts of the Fairness Tax Bill, end of June, it has become clear that the newly introduced Fairness Tax (FaTa) will have some counter-intuitive consequences and, under certain circumstances, that it may also be overruled by bilateral treaties or EU law.

It should be remembered that the Fairness Tax is due for any tax year if a dividend distribution takes place and losses of prior years are being used against taxable profits or use is made of the notional interest deduction. FaTa is an extremely complicated tax that can apply in situations that no-one reasonably expects and in cases that likely were not intended under the spirit of the legislation (as it was communicated to the public). It is most certainly not a minimum tax nor is it an alternative tax, it is an additional tax 'pure & simple' that can perfectly apply for companies with a very high effective tax rate. All depends upon how dividend-policy is spread over the years and how the taxable basis is composed and compared to used notional interest deductions and carry forward tax losses in the year of dividend distribution.

The texts are very vague and unclear. We expect there will be more modifications or interpretations in the next few months but we already see now that this new tax will give rise to considerable controversy.

A team of specialists will host a special webcast on FaTa on 25 September from 9.00 am to 9.45 am. They will explain the many situations when it applies, illustrating these with examples and provide simple ways to try and moderate the effect of FaTa.

Meanwhile, if you want to understand and know more about FaTa, please visit the following website www.fairnesstax.be. This website will be updated regularly and we appreciate your suggestions. Please use the simplified calculation tool on the website to calculate the first estimated effect of a dividend distribution in 2013 and going forward.