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Belgium: Tax plans of new coalition government

Belgium: Tax plans of new coalition government

A coalition agreement to form a federal government by seven political parties includes tax measures.

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The tax measures in the coalition agreement include the following:

Supporting recovery in a pandemic

The coalition agreement contains some concrete, short-term measures to stimulate the economic recovery in response to the coronavirus (COVID-19) pandemic.

  • In order to strengthen corporate solvability, companies would be allowed to exempt part of their profits for financial years linked to assessment years 2022, 2023, and 2024 by recording an exempt “reconstruction reserve.”
  • To stimulate business investment, the increased investment deduction of 25% (for small and medium size enterprises (SMEs)) would be extended for two additional years (2021 and 2022).
  • With Brexit approaching, businesses would need to be supported in their international activities, so that customs controls would have a minimal impact on trade with the UK. The specific actions that the government wants to take in this respect remain unclear.


Plans regarding income taxation

The new coalition government also has stated its tax intentions for the longer term.

  • The corporate income tax reform by the previous government would be maintained, including the rate reduction to 25% (20% for SMEs).
  • Principles for an individual income tax reform by 2024 would provide a reduction of taxes on labor, a broadening of the tax base, simplification of the tax system, and a gradual shift from alternative rewards to rewards in euros.
  • Regarding estate planning, the coalition agreement contains no mention of a capital gains tax or securities tax. However, the new government has indicated that it will strive for "an honest contribution by people who can carry the heaviest burden, with respect for entrepreneurship.” The tax regularization would end 31 December 2023. Tax savings by registration of notary deeds abroad would be prevented, and balances of Belgian bank accounts would be communicated to the “central point of contact.”
  • All new company cars would have to be emission-free by 2026. Employers would be able to award a mobility budget to employees who cannot qualify for a company car.
  • Employers would also receive a tax incentive for training their employees.


Plans for international tax developments

The ongoing efforts at OECD and EU levels to reform international taxation would be supported.

  • There would need to be some form of digital taxation, preferably by international agreement. If such an agreement is not possible, Belgium would introduce a digital services tax, but only as from 2023.
  • Belgium would support the implementation of a minimum tax (Pillar 2 of BEPS 2.0).
  • The government would support implementation of the OECD recommendations in EU law.


Read an October 2020 report prepared by the KPMG member firm in Belgium

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