Belgian parliament approves new wave of tax measures and announces a fiscal “bazooka” for businesses
On 20 May 2020, the Belgian federal Parliament approved a draft bill introducing a new wave of tax measures to support Belgian taxpayers suffering from the Corona outbreak. Furthermore, the Belgian tax authorities extended the deadline for companies with a financial year-end between 1 October 2019 and 30 December 2019 for filing their (non-resident) corporate income tax return. Finally the Belgian Government agrees on a fiscal ‘bazooka’ for business heavily suffering from the economic fallout of the COVID-19 outbreak.
New wave of tax measures
Extended filing deadlines for corporate income tax returns
Companies with a financial year end between 1 October 2019 up to and including 30 December 2019 can benefit from an extended filing deadline for the (non-resident) corporate income tax returns and legal entities tax returns. These tax returns should be filed within 7 months (irrespective when the shareholders meeting is scheduled) as from the first day of the month following the financial year-end.
Furthermore, companies are allowed to postpone the general shareholders meeting (approving the financial statements) with maximum 10 weeks and under certain conditions. If the company is subsequently not in a position to submit the tax return in due time, an individual extension on the aforementioned deadline can be requested.
Fiscal “bazooka”
Next to the financial “bazooka” put in place several weeks ago in order to safeguard the liquidity position of COVID-19 affected businesses through eased bank financing, the government recently decided to launch a fiscal “bazooka”, i.e. a set of 2 tax measures aimed at providing tax relief in order to increase both liquidity and solvability of the latter businesses. Although still at the early stage of the legislative process, it is our understanding that these measures would allow a so-called ‘carry-back’ of current-year losses. More specifically, both for companies and self-employed individuals, expected losses of the current taxable period could be imputed on the taxes due relating to profits of the previous taxable period. This would also allow to reclaim tax prepayments already paid in 2020.
The second measure would consist of a so-called ‘recovery reserve’ for companies to help safeguard their solvability suffered due to the COVID-19 outbreak. In practice it would mean that during 3 consecutive taxable periods relating to tax years 2022, 2023 and 2024, companies would be allowed to secure profits corresponding to the amount of losses they have incurred In 2020, under the conditions of maintaining their equity position as well as their existing employment level.
We will provide more details on these measures as more information will become clear further in the legislative process. In case of any further questions with regard to the adopted measures, please contact your EY person of contact.