Tax Alert

Parliament approves pending tax legislation

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EY Belgium Tax
1 Feb 2019
Subject Tax alert
Categories Indirect Tax
Jurisdictions Belgium

The approval of pending tax laws previously became uncertain due to the resignation of the Government at the end of last year. However, the House Representatives approved 2 pending tax laws yesterday.

The law containing tax, anti-fraud, financial and miscellaneous provisions (Doc 3424)

The law accelerates the entry into force of the interest limitation rule provided for by the EU ATAD (1/1/2019 instead of 1/1/2020). Some aspects of the new regime will still require a Royal decree (the allocation of the EUR 3.000.000 threshold on the on hand and a definition of economical equivalent expenses and income on the other).

Furthermore, the law brings about changes to the so-called ‘vrijstelling voor sociaal passief/exoneration pour passif social’. This regime was introduced by the former Government Di Rupo and relates to the special single employment status for blue collar and white collar workers. The regime enters into force as of 2019. The exemption will be spread over a period of 5 consecutive taxable periods.

The law also introduces additional reporting and withholding tax (WHT) requirements in relation to remunerations paid or attributed by foreign entities (mostly share-based incentive programs). The new WHT requirements will apply as from 1 March 2019. Due to the filing dates, the reporting requirements will only apply as from 1 January 2019. For any payments or grants during income year 2018, the proper reporting of this income still lays with the beneficiary only.

Finally, the law contains various measures to counter tax fraud further to certain recommendations made by the special parliamentary Panama Papers Commission, a.o.:

  • A ban on tax rulings regarding transactions or situations, containing essential elements relating to tax havens;
  • A prolongation of the investigatory and assessment period up to 10 years in cases where use was made of legal structures in tax havens, aimed at hiding the origin or the existence of fortune;
  • The extension of the field of application of the exchange of information with regard to the identity of ultimate beneficiaries.

The law modifying the VAT Code with regard to the treatment of vouchers and special rules for the delivery of telecommunication, radio, television and electronic services to consumers (Doc 3408)

The law transposes the EU VAT-directive (EU) 2016/1065 of 27 June 2016 and the EU VAT-directive (EU) 2017/2455 of 5 December 2017 in respect of vouchers and the delivery of certain services.

EY closely follows up on pending tax legislation following the resignation of the federal government.