Belgium: Bank tax

Following budgetary discussions, an additional annual bank tax has been proposed. It is very similar to the annual bank tax already existing since 1993 that will continue to be applied alongside the currently proposed bank tax, the contribution to the deposit protection fund and the financial stability contribution. This new bank tax would bring the number of Belgian taxes specifically applicable to banks up to four. Parallel to the new bank tax, the rates applicable to the already existing yearly contribution to the deposit protection fund will be increased. Pursuant to a draft bill of 15 May 2012, the new annual bank tax will have to be paid by Belgian banks and foreign banks with a branch in Belgium. Basis for the calculation of the tax due are regulated savings deposits. The deposits must be held by a bank governed by the Law of 22 March 1993 on credit institutions and must meet certain well-defined requirements. The total amount of regulated savings deposits on 1 January of the assessment year is first reduced by the interest payments on the given deposits relating to the year preceding the assessment year. Then this amount is multiplied by a fraction of the total amount of payments potentially qualifying for exemption under the Belgian Income Tax Law and the total amount of interest payments on such regulated savings deposits in the year preceding the assessment year. A tax rate of 0.05% is applicable. However, this rate is to be adjusted on the basis of a ratio which measures the extent to which the bank effectively grants support to the European economy. To that end, the bank’s ratio of “European loans not granted to financial institutions” in relation to regulated savings deposits has to be determined. The tax return must be filed – and the tax must be paid – by 1 July of the assessment year. A fine of 250 euro per week is due if the tax return is not filed in time, while interest for late payment stands at a rate of 7 %. On 1 July 2012, the tax should become payable for the first time.

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