Tax authorities announce targeted audits

A few days before sending out the tax returns for 2017, the tax authorities announce on their website (FR/NL) which groups of taxpayers they will audit more specifically. For individuals, these are Company directors who deduct their actual business expenses instead of the lump sum deduction. The tax administration suspects that some directors artificially prove more professional expenses in order …

Belgium Proposes VAT Regime for Real Estate Rentals

After a budget review, Belgium’s federal government proposed in its summer budget in March an optional VAT regime for rental agreements, starting October 1, 2018. For more, read the contribution in Tax Notes International or ask the author.

Belgium and Netherlands Sign Agreement on Taxation of Pensions

On 5 March, Belgian and Dutch officials signed an agreement clarifying the taxation of pensions under article 18 of the double tax treaty (in English) between the two countries.  The agreement was published in the Staatscourant (the Dutch official journal). The agreement is the result of a change in policy announced by the Dutch government at the end of last …

Constitutional Court Writes Obituary for Fairness Tax

The Belgian Constitutional Court has annulled the so-called fairness tax, abiding by a judgement of the Court of Justice of the European Union, from which the Constitutional Court had sought a preliminary ruling. However, contrary to what most observers had hoped, the Constitutional Court’s ruling does not cancel the tax retroactively, except in one specific situation. For more, read the …

Belgium’s first wealth tax : a tax on securities accounts

On February 1, the Belgian Parliament adopted a law introducing an 0.15 percent tax on financial instruments held in securities accounts with a value over €500,000. That will, in effect, be a wealth tax on securities and brokerage accounts. For more, read the contribution in Tax Notes International or ask the author.  

New tax rules in Wallonia in 2018

On 13 December 2017, the Walloon Parliament has modified certain tax rules regarding inheritances and donations as well as the purchase of a building. In respect of inheritance tax, the surviving spouse or civil partner will be entitled to total exemption for the family home.  Until 2017, this exemption was limited to € 160,000.  Wallonia is thus on the same …

Voluntary Disclosure Regime in a Federal State

In 2015 Belgium’s federal government decided to give taxpayers (another) last chance to regularize unpaid taxes and social security contributions. The law introducing a new, permanent voluntary disclosure regime for tax and social security matters, dated July 21, 2016, entered into force on August 1, 2016. Or at least it did in theory. The challenge: In a federal state where …

VAT Authorities Take Careful Step Toward Substance Over Form

In a carefully worded practice note dated October 12, the Belgian VAT authorities have announced that they are relaxing their strict adherence to the form-over-substance approach regarding the conditions for the deduction of the input VAT paid on invoices received (Practice Note 2017/C/64 relating to the invoice as a condition for the exercise of the right to deduct VAT). Until …

Belgian Supreme Court Upholds Tax Treaty Precedence Over Domestic Law

The Belgian Supreme Court recently confirmed that Belgian tax authorities cannot hide behind the text of the domestic law to deny Belgian taxpayers the benefit of the Belgium-France tax treaty. (1971 protocol; 1999 protocol; 2008 protocol; 2009 protocol.) The case is a classic example of double taxation of dividends. French dividends are taxed at source at a reduced rate of 15 percent, and the …

Government agrees on budget and tax shift

Prime Minister Michel announced that his Government had reached an agreement on the budget for 2015 and 2016 and on a “tax shift” of €7.2 billion.  The government had to find an additional € 978 million to balance the budget for this year and to reduce the deficit to 2.5 percent as promised to Europe. An additional € 800 million …