Belgium: Surcharge on investment income

At the end of December 2011 the Program Law has introduced a supplementary crisis contribution of 4% due on movable income (interest and dividends) subject to the 21% rate and for the amount exceeding an annual threshold of EUR 20.020,00 (indexed amount for 2012).

It is therefore necessary to determine first the amount of the total movable income because only the income taxed at 21% is potentially subject to the 4%.  Movable income qualifying for the determination of the threshold does not include tax-exempt interest from regulated savings deposits and other interest and dividends which are not taxable according to the income tax law.

The contribution will in principle be levied through the individual income tax return and the debtor of the income will have to communicate the appropriate information (amount of the income and name of the beneficiary of the income) to a central contact point.

Alternatively and upon request of the taxpayer the contribution may be withheld at source. Only interest and dividends that have been subject to the special surcharge of 4% at source will not need to be reported to the central contact point.

While initially the law only applied to the debtor of the income, in an amendment published in the Official Gazette at the beginning of April, the reporting obligation has been extended to paying agents (such as banks). The debtor of the income is responsible for reporting as far as registered securities are concerned. In all other cases the paying agent will have to fulfill the reporting obligation.

At the beginning of April the Belgian income tax authorities released a comment on the formalities related to the tax return and payment of the surcharge. A specific tax return has been published, that at this stage can only be filed on paper and sent to one of the four services mentioned on the tax return depending on the fiscal residence of the debtor. In future it will be possible to file the return electronically.

The surcharge can be applied to movable income paid or attributed as of 1 January 2012 if the taxpayer has requested to withhold the tax at source. As the tax authorities were late in publishing the practical modalities of the 4% surcharge, interest for late payment will only be due as of 1 June 2012 for dividends or interest attributed or paid between 1 January and 15 May 2012.

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