Belgium: Tax provisions in third package of stimulus measures (COVID-19)

Belgium: Tax provisions in package of stimulus measures

The third law containing tax measures in response to the coronavirus (COVID-19) pandemic was published on 23 July 2020 in the official gazette.


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This new law is intended to help companies address the economic crisis and includes various measures such as:

  • An exemption from paying the wage withholding tax for employers that have resorted to temporary unemployment for at least 30 days until 31 May 2020—the exemption available is 50% of the difference in wage withholding tax compared to May 2020 (for a maximum of €20 million) can be granted in June, July, and August 2020
  • A tax reduction for donations in 2020 (for individual income tax) with an increase in the rate of the reduction from 45% to 60% and a maximum amount from 10% to 20% of the net income
  • For donations of computers made to schools, the deduction (corporate tax) or tax reduction (individual tax) is extended until 31 December 2020
  • Further relaxing of conditions for tax reduction for child care—an extension for payments made in 2019 and from 30 June until 31 December 2020
  • Exemption and deduction of consumption vouchers—employers will be able to buy consumption vouchers from certified institutions for a maximum of €300 per employee until 31 December 2020. The vouchers will be valid until 7 June 2021 in the horticulture sectors and will be fully deductible for the employer and tax-exempt for the employee
  • A 100% deduction for reception costs made between 8 June and 31 December 2020
  • An investment deduction—increase to the rate from 8% to 25% for investments made between 12 March 2020 and 31 December 2020 (only for small companies), and a carryforward for unused investment deduction possible for two years, instead of one year, for investments made in 2019
  • The scope of the loss carryback has been narrowed to accounting years closing between 13 March 2019 and 31 July 2020 (instead of 31 December 2020)
  • Tax reduction (individual income tax) for acquisition of new shares of small companies of which the turnover dropped by more than 30% between 14 March 2020 and 30 April 2020
  • An extension of the annual insurance tax regarding payment facilities until the end of the year
  • No payment of value added tax (VAT) advances in December 2020
  • An extension of the VAT exemption for donations of computers to schools from 30 June until 31 December 2020
  •  Confirmation of the Royal Decree introducing the temporary reduced VAT rate of 6% for restaurant and catering services (excluding alcoholic drinks)

Read a July 2020 report prepared by the KPMG member firm in Belgium

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