Belgium: Pillar Two prepayment system

News on tax developments affecting the international Financial Services industry.

In this article, we explore the impact of recent Belgian case law on Luxembourg UCIs and their potential to reclaim subscription tax under the Belgium-Luxembourg tax treaty.

The VAT chain reform introduces new compliance measures and deadlines, impacting taxpayers starting 1 January 2025. Key changes include new filing deadlines, VAT credit management, and stricter penalties.

The European Court of Justice decided on November 7, 2024, that the levying of withholding taxes on dividends received by foreign insurance companies on their investments relating to unit-linked insurance policies can violate EU law.

The Belgian tax authorities (FPS Finance) announced that from 2 September 2024 multinational enterprises (MNE) and large domestic groups subject to the minimum tax for MNE groups and large domestic groups (Pillar 2) can start their Pillar 2 related prepayments.

The Belgian government submitted its proposal for a mandatory B2B invoicing scheme.

The Belgian government's proposed draft program law on the cayman tax faces scrutiny for introducing extensive changes, prompting concerns about its logic, potential legal challenges, and its perceived bias towards tax authorities.

On 21 June 2023, Belgium and the Netherlands signed the new double tax treaty. This treaty was a long-awaited one since the last version dated from 5 June 2001.

The 1 January 2022 a new expat tax regime introduced in Belgium that provides for a favourable income tax (and social security) treatment for employees, directors and researchers recruited abroad or seconded to Belgium.

A common challenge in M&A transactions is to achieve a tax-effective interest deduction with regard to the acquisition funding.

The double tax treaty between Belgium and Luxembourg gives the opportunity for Luxembourg residents to lower the Belgian withholding tax rate of 30% to 15% and even in some cases to 10% for Belgian sourced dividends.

n the context of the latest budgetary measures, a decision has been taken to intensify the taxation of the financial intermediaries (banks, insurance companies and investment undertakings). The changes are therefore aimed at the entire financial sector.

On Thursday the 27th of October 2022, the Belgian Constitutional Court has delivered its long-awaited judgment on the constitutionality of the annual tax on securities accounts introduced by the Act of February 17, 2021 (hereafter “ATSA”).

The Annual Tax on Securities Accounts (hereafter: “ATSA” – also known as de “Jaarlijkse Taks op de Effectenrekeningen”, JTER or “Taxe annuelle sur les comptes-titres”, TACT) is applicable (among other things) to securities accounts held in Belgium, even if they are held by non-Belgian residents/account holder.

The majority of the Belgian corporate (statutory) investment vehicles subject to a regulated financial regime (either UCITS or AIF) can benefit from a reduced corporate tax base.

The ELTIF is intended to promote long-term investments in the real European economy (‘Europe 2020 strategy’).

An amendment to Royal Decree no. 31 has altered the guarantee requirements for a Belgian VAT registration of a foreign taxpayer with the appointment of a fiscal representative. These changes have entered into force as of 1 October 2021.

The Belgian government agreed in the recent budgetary agreement on important changes for foreign executives falling under the special taxation regime.

In a recently published decision of the Court of Appeal of Ghent relating to TP (no. 2016/ AR/455), the Court decided in favour of the taxpayer. The case originated from an audit initiated by the Special Investigation Squad (BBI/ISI) in 2009. Considering TP cases in Belgium are scarce, it is interesting to see the court’s point of view.

In the present contribution, we focus on special rules which apply to dedicated investment funds.

The salary of a Belgian tax resident relating to days performed in Luxembourg is generally taxable in Luxembourg according to the Belgium-Luxembourg double tax treaty. The days worked outside of Luxembourg are then taxable in Belgium (state of residence).

A new annual tax on securities accounts came into force on 26 February 2021. With a tax rate of 0.15%, the new tax applies to securities accounts holding financial instruments with an average value of more than 1 million EUR during a given tax year. 

The first web event of the Tiberghien World Tour 2021 on 27 May covered the Americas. For all those who may have missed the first event, Tiberghien & Tiberghien economics list the key learnings in their article.

Since 1 January 2020, a new measure allows for the granting of a VAT credit refund within one month after submission of the VAT return, whereas this refund generally takes up to three months to six months.

An overview on the final version of the circular letter “Transfer Pricing” published by the Belgian Tax Administration (BTA)

A Royal Decree on the interest limitation rules provided by the Anti-Tax Avoidance Directive (‘ATAD’) was published just before the end of last year.

The Belgium-Luxembourg double tax treaty’s main rule is that if the employment is carried out in Luxembourg, then the salary relating to the days performed in Luxembourg is taxable in Luxembourg and exempted from tax in Belgium.

However, obtaining the exemption for this income in Belgium is not always straightforward.

The EU General Court ruled in favor of Starbucks and in disadvantage of Fiat on the European’s Commission claim that both companies received illegal state aid

Tiberghien's Gerd D. Goyvaerts and Alain Van Geel are recognised as notable practitioner

Article from Global Mobility Newsletter #1/2019

The reform is deemed necessary to counter intra-EU fraud 

The law on various financial provisions has been successfully passed prior to the dissolution of parliament

Two recent judgments of the Court of Justice of the European Union are of particular importance for the European beer sector

More information and registration

The ECJ also decides that a Luxembourg Sicar cannot benefit from the WHT-exemption under the IRD, to the extent that the interest income is exempt from Luxembourg corporate income tax

The new policy is intended to make the penalty regime less strict, taking into account the concept of “good faith”

New judgment of 14 February 2019