Belgium

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Return to homepage  |  Last updated: 2 December, 2020

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Measures taken by the social security authorities

• An extension is granted for the deadline to pay social security contributions for the first and second quarter of 2020 until 15 December 2020.
• Companies from affected sectors will receive a compensation for the social security contributions due for the third quarter of 2020
• Businesses can request a payment plan for their social contributions which are due for 2020. This plan allows for payment to be spread over a maximum of 24 months. Businesses must file a specific application form wherein they must provide evidence of the financial impact of the crisis on their business.
• The Belgian social security authorities confirmed that a possible supplementary pay of the employer, in addition to the temporary unemployment allowance can be allocated to the employee with exemption of Belgian social security provided that the eventual total net pay (allowance + supplement) will not be higher than the regular net salary should the employee have worked.
• Businesses can also invoke temporary unemployment as a result of “force majeure”. Employees will benefit from a temporary increase of their allowance in the event of temporary unemployment. The “RVA/ONEM” will bear an amount of 5,63 EUR/day of unemployment.

Measures for the self-employed

• The self-employed can also benefit from support regarding their social security contributions in the form of a reduction, delay or exemption of payment. If you are obliged to interrupt or stop your activity because of the crisis you can apply for a replacement income.

Characteristics of short-time work concept

• Full-time employees are entitled to 70% of the (possibly capped) salary, regardless of the family situation. 

• When businesses suffer a loss of turnover of at least 60%, they can apply for a tax-free premium as a compensation (‘New Flemish protection mechanism’)
• The conditions and tax incentives linked to the ‘Winwinlening’ (loans) are loosened and made more attractive. A similar regime will be introduced for share participations (‘vriendenaandelen’).
• Individuals investing in the Flemish ‘Welvaartsfonds’ can benefit from a tax reduction. The shares in the fund are also subject to reduced inheritance tax. Businesses can go to the fund for a capital increase or a loan.
• Registration and inheritance tax: extension of deadlines to comply with tax obligations until 31 January 2021 (declaration of inheritance, registration of act, conditions of favorable regimes)
• The assessment notices regarding immovable withholding taxes for businesses will only be sent as from September 2020 (instead of May) – payment can be deferred for 4 months
• Businesses can defer payment of road taxes for 4 months
• Flexibility in judging requests for payment plans
• The Flemish legislator has introduced an additional possibility for the heirs of a deceased person whose inheritance contains an investment portfolio of listed securities. The heirs already had the choice to declare in the inheritance tax return (1) the value of these securities at the date of death, (2) one month after the date or (3) two months after the date of death.
  
  The Flemish legislator has now introduced a temporary possibility to opt for the value these securities have three months after the date of death. This additional option is available if the deceased passed away between 13 September/October/November 2019 (depending on the place of death of the deceased) and 30 September 2020. If the heirs filed the inheritance tax return before 21 April 2020, they can file a new return in which they can ask to modify their previous choice in order to make use of this new possibility.

Tax Measures

• Immovable withholding tax assessment notices for AY 2020 are postponed to August/September
• Inheritance tax and registration duties: suspension of the deadlines to comply with tax obligations (filing, payment, conditions of favorable regimes, procedure)
• Tax on automatic entertainment devices, which particularly affects the horeca sector, will be reduced by 1/12 per month or part of a month of mandatory closure.

Other measures

• (Very) small businesses suffering an impact from the decisions of the National Security Council can ask for a tax-free compensation of 5.000 EUR
• Mobilization of regional agencies (SOWALFIN, SOGEPA-Wallonie Santé Group, SRIW) via loans (e.g. « ricochet loan »), guarantees, frozen reimbursements, etc.

• The postponement of the payment deadline for road taxes and immovable withholding tax.
• Inheritance tax and registration duties: suspension of the deadlines to comply with tax obligations (filing, payment, conditions of favorable regimes)
• Support (premiums, loans, …) for affected sectors (horeca, events, cultural sector, …)
• Tax incentive for loans by individuals to SMEs (proxi-loan)
• Government guarantees on bank loans
• The accelerated treatment of grants of expansion support for certain sectors (horeca, tourism, culture and events)
• The abolition of the regional City Tax for 2020

Duty relief

• Under certain conditions, donations of personal protective equipment to the medical sector are eligible for import duty relief.

Customs clearance

• Economic operators are allowed to temporarily submit paper-based certificates and licenses digitally.
• Economic operators can only obtain a E705 form online for the registration of motor vehicles purchased abroad via MyMinfin.
• Adaptation of the validation procedure for endorsing 136F documents for diplomatic and consular missions and international organizations in Belgium.

Customs authorizations

• All authorizations holders (inward processing, customs warehousing, temporary storage facilities or approved/designated places) are allowed, under certain conditions, to apply by e-mail to the issuing competent customs authorities to extend their authorization with other storage facilities.
• The customs authorities shall,  under certain conditions, grant a temporary approved exporter authorization (preferential origin) without any prior customs audit.

Export

• In Belgium, the Federal Public Service (FPS) Economy is the competent authority to grant export authorizations.

Excise

• The excise authorities allow pharmacists, not having the proper excise authorization, to manufacture disinfectants provided that they keep records.
• The excise authorities allow all authorized warehouse keepers to produce denatured ethyl alcohol, although only to the extent that it is used to ensure the production of biocidal products or disinfectants intended for the medical sector.
• The excise authorities provide guidance to manufacturers (excise warehouse keepers or pharmacies) of  various types of sanitizers to benefit from an excise duty exemption.
• The excise authorities have extended the payment terms for both holders and non-holders of a credit account as regards excise duties and waste packaging tax on alcohol, alcoholic and non-alcoholic beverages and VAT.

The Flemish regional government has also agreed on an investment package of 4,3 billion EUR (in digitalization, sustainability, education, health care, R&D, 5G, mobility)

Main measures

Tax measures by the new federal government

The ‘equity reconstruction reserve’

Companies will be able to exempt part of their profit for the taxable periods 2021, 2022 and 2023 (linked to assessment years 2022, 2023 and 2024) by recording that profit on an exempt ‘reconstruction reserve’.

The amount is limited by a double ceiling: the accounting loss of income year 2020 and an absolute maximum of 20 Mio EUR.

However, equity and employment must be maintained:

• The reconstruction reserve is taxable when there is a capital reduction, dividend distribution or liquidation;
• An employment condition also applies: the personnel cost for income year 2020 and the 3 following years should equal at least 85 % of the personnel cost paid in 2019. If not, (a part of) the reconstruction reserve will become taxable.

Companies that have a direct participation in companies located in tax havens or that make payments to tax havens that cannot be economically or financially justified, will be excluded from the regime.

*Companies with closing date between January 1st 2020 and July 31st 2020 can opt to apply this measure for the financial year closing in 2021 instead of 2020.

Investment deduction

Extension of rate of 25% to the end of 2022 (applicable to SMEs)

Tax incentive for training of employees (exemption of wage WHT)

VAT

Extension for two years of the reduced rate of 6% for the demolition and reconstruction of housing

The new government has agreed on an investment package of 4,7 billion EUR (in digitalization and sustainability)

Main sources of information

• Website Belgian customs and excise authorities
• Belgian Government
• The coronavirus and its consequences
• Coronavirus: reduction of economic losses for companies
  

Tax: Eric Warson – ericwarson@kpmg.com
Restructuring: Jorn De Neve – jdeneve@kpmg.com
Legal: Wouter Lauwers – wlauwers@klaw.be