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Belgium: new tax transitory regime

Alessandro PasutThe Belgian tax authorities issued a circular letter regarding this transitory regime providing for additional information on the conditions that must be fulfilled for the dividend distribution and for the contribution of the dividend into the capital of the company.
The dividends must be paid out of the taxed reserves that are available for distribution to the shareholders. Distributions of taxable provisions and hidden reserves do not qualify. The transitory regime is limited to the distribution of reserves that have been approved by the General Shareholders’ Meeting prior to 1 April.
As a result, for companies whose accounting period coincides with the calendar year, the transitory regime only applies to the reserves of the accounting period ending on 31 December , provided that these accounts were approved on 31 March at the latest. If the accounts per 31 December were approved after 31 March, then the transitory regime applies to the reserves of the accounting period ending on 31 December.
The program law establishes a limit for the amount that can be distributed under this beneficial regime, based on the dividend distributions over the preceding 5 years.

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Belgium new income taxes

Belgium new income taxes. The government has reached an agreement on additional budget and recovery measures for 2013. Besides the intent to strengthen the fight against tax fraud, several tax measures have been agreed.

The notional interest deduction rate for 2013 will be applied based on the OLO rate of the third quarter of 2012 (2.742%) (+0.5% for small and medium-sized enterprises). A 25% withholding tax will be levied on income from moveable goods with some exceptions. A 0.4% capital gains tax on shares will be applied from 2013 for “holding companies” (excluding small and medium-sized enterprises) in cases where these capital gains are currently tax exempt.

Among other measures, the Belgium VAT rate of 21% will be raised to 22%, lawyers will be subject to VAT, certain tax reductions will be abolished while the introduction of a capital gains tax on shares for personal income tax purposes and of a minimum tax for corporate income tax purposes is envisaged. Finally certain fines currently still deductible for income tax purposes will no longer be deductible.

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