Belgium: Tax proposals in budget 2024 include real estate VAT changes, mandatory e-invoicing, stricter CFC rules
The federal government reached an agreement on the budget for 2024.
The federal government reached an agreement on the budget for 2024.
The federal government reached an agreement on the budget for 2024, which includes the following tax proposals:
Real estate
- Extension of the reduced value added tax (VAT) rate of 6% under the existing permanent scheme for demolition and reconstruction of real estate in Belgium’s 32 central cities to the entire Belgian territory effective 1 January 2024 (with introduction of certain social conditions)
- Reduced VAT rate of 6% no longer applicable for sale by real estate developers effective 1 January 2024
- Transitory relief until 31 December 2024 for the expiring temporary regime for permits requested before 1 July 2023 and in respect of the expiring regime for the 32 central cities for permits requested before the end of this year
- Extension of reduced VAT rate of 6% on heat pumps for one year
- Repeal of reduced VAT rate of 6% for supply and installation of solar panels effective 1 January 2024 (except for certain private dwellings)
- Increase of registration duties on ground lease and building right from 2% to 5%
- Stricter conditions for beneficial tax regime for specialized real estate investment funds
Anti-tax avoidance
- Introduction of mandatory electronic invoicing (e-invoicing) for taxable persons (B2B) effective 1 January 2026
- Stricter CFC rules (i.e., shift to option A of the ATAD Directive and implementation of art. 7, section 3 of ATAD)
- Strengthening amendments to anti-abuse measures of art. 54 and 344, §2 BITC
- Stricter Cayman tax in line with the recommendations of the Court of Audit
- Better auditing of application of legal entities tax and of special corporate tax regimes in light of the reformed legislation on associations (in particular the correct application of art. 181 and 182 BITC)
Financial taxes
- Increase in annual tax on credit institutions by turning it into a progressive tax with a new rate of 0.17581% for savings deposits above €50 billion
- Repeal of tax deduction for annual tax on credit institutions, as well as for annual tax on collective investment institutions and insurance companies (already limited to 20%)
Green transition
- Decrease in excise duties on electricity and increase in excise duties on fossil fuels (gas and propane, but not fuel oil and coal) effective 2028 (except for professional users)
- Further phasing out of the system of professional diesel (decrease with €10/1 liter)
- Increase in excise duties on tobacco and alternative tobacco products
Next steps
The agreed measures will now be translated into legislation that is expected to be approved by the end of the year.
Read an October 2023 report prepared by the KPMG member firm in Belgium
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