Belgium: Reception cost

Reception cost. According to the Belgian VAT Code, VAT paid on reception costs is not deductible while VAT paid on publicity expenses is deductible. In 2005 the Belgian Supreme Court had already decided that VAT paid on expenses incurred in the framework of the organization of an event for publicity purposes could be deducted.

The Belgian tax administration acknowledged the Supreme Court’s decision, but noted at the same time that VAT paid on food and drinks within the framework of a publicity event was not deductible. This viewpoint caused new discussions. While Belgian courts ruled repeatedly that the costs for food and drinks could also be treated as deductible publicity expenses, the Belgian tax administration kept stating the contrary.

Recently, the Belgian Supreme Court settled the long-standing debate. The fact that VAT on food and drinks is not deductible does not apply, according to the Supreme Court, when it concerns catering costs which are to be considered as publicity expenses. Therefore the tax administration will have to change is position in this matter.

Payments to tax havens. As from assessment year 2010, companies must report, on a separate form which must be joined to the resident or non-resident corporate tax return, direct or indirect payments made since January 1, 2010 to persons established in a tax haven. This reporting obligation arises only if the total of payments during the taxable period amounts to at least EUR 100,000.

As ‘tax havens’ qualify States which either, during the entire taxable period in which the payment is made, are on the ‘grey’ or ‘black’ OECD-list with countries that do not apply the standard for the exchange of information ‘effectively or substantially’ or are on the list of States without or with a low taxation (nominal corporate tax rate below 10%).

The list has now been determined by Royal Decree. It contains: Abu Dhabi, Ajman, Andorra, Anguilla, Bahamas, Bahrain, Bermuda, British Virgin Islands, Cayman Islands, Dubai, Fujairah, Guernsey, Isle of Man, Jersey, Jethou, Maldives, Micronesian Federation, Moldova, Monaco, Montenegro, Nauru, Palau, Ras al Khaimah, Saint-Bartholomew, Sark, Sharjah, Turks and Caicos Islands, Umm al Qaiwain, Vanuatu andWallis and Futuna.

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