Belgium introduces Transfer Pricing Documentation

Apart from the new tax regime for the sharing economy, the Programme law of 1 July 2016 (Belgian State Gazette 4 July 2016) introduced a number of other fiscal measures, including provisions that introduce transfer pricing documentation in line with Action 13 of the OECD’s BEPS project and other budgetary measures, including measures to combat tax fraud. The Law implements the three-tiered standardized approach set …

New Penalties for Failure to Report Legal Arrangements

In 2015, Belgium introduced a transparency or “look-through” tax for legal arrangements such as trusts and trust-like arrangements and for other legal arrangements that have legal personality. The founder or the sponsor of such legal arrangement is taxed on the income of the legal arrangement as if it was his personal income, unless a beneficiary has received the income. Moreover, when the original founder dies his …

Belgium Extends Reporting of Payments to Tax Havens

Since 2010 Belgian companies and permanent establishments of foreign companies must report in their annual tax return all (direct and indirect) payments they have made to tax havens (art. 307 ITC 1992) for a total of EUR 100,000 or more. If they are not reported, these payments are not tax deductible. When reported, such payments are only tax deductible if the taxpayer can justify that …

Belgium updates list of tax havens

In two Royal Decrees dated 1 March 2016 (published in the Belgian State Gazettes of 10 and 11 March 2016), the Minister of Finance has updated the list of countries which are deemed to have an advantageous tax regime. The first list relates to the participation exemption, the basis for the Belgian holding company regime. One of the conditions for the participation exemption or dividend received deduction …

Switzerland, as a direct democracy, organises about five referendums every year.  On Sunday, Swiss voters have rejected proposals to restrict immigration and to abolish the favourable tax regime for wealthy foreigners living in Switzerland. The major issue in the referendum of 30 November was the initiative “Save Our Swiss Gold”, that would have obliged the government to increase its gold reserves, and to shore up …

Belgium adapts legislation to take account of personal and family circumstances

On 11 September 2015, the tax authorities published an addendum to Practice Note Ci.RH.331/575.420 (AOIF 8/2008) with respect to the granting of benefits linked to a taxpayer’s personal or family situation. The addendum is issued in response to a reasoned opinion issued by the European Commission on 16 July. The Commission asked Belgium to adapt its rules on tax benefits connected to the personal or family situation …

Belgium lists Luxembourg and Cyprus as tax havens …

… but says not to take it too seriously. The tax authorities have published an addendum to their practice note Ci.RH.421/607.890 (AAFisc nr. 64/2010) to comment on the list of states that have not effectively or substantially implemented the OECD exchange of information standard. Since 1 January 2010 Belgian companies and permanent establishments of foreign companies must report in their annual tax return all (direct …

Belgium reorganises audits of large enterprises

On 1 July 2015, the Ministry of Finance has set up 7 regional offices ‘Large Enterprises’ that will be in charge of the audit and the dispute resolution for some 15,000 large enterprises and non-profit organisations.  As of 1 July 2016, the Ministry will stop auditing these large enterprises based on the type of tax due (company income tax, VAT) and organise audits on the basis of …

European Commission refers Belgian to European Court of Justice

On 18 June 2015 the European Commission announced that it is referring Belgium to the Court of Justice of the European Union because it taxes Belgian residents differently on property abroad and at home. If a Belgian resident earns income from property located abroad, that is taxed at a higher value than that from comparable property in Belgium. The Commission does not criticize the way Belgium assesses …

About shifty tax shifts

The buzz word in Belgian politics these days is ‘tax shift’. Forget about reducing taxes or cutting expenditure, the tax burden is to be shifted. The question is how and where. For many years, AmCham Belgium has been lobbying the government to reduce employment costs. As Eurostat’s figures show, Belgium has the highest labor cost within the eurozone, and within the EU, Belgium comes second after …