CORPORATE TAX
1. Automatic deferral of the filing of the CIT, legal entity tax and CIT-NR declarations
The corporate income tax, legal entity tax and non-resident company tax returns of taxpayers is postponed
to Thursday 30 April 2020.
This additional period only applies for tax returns with a filing deadline of 16 March to 30 April 2020.
The deadline for filing the CIT, legal entity tax and CIT-NR company tax returns for companies having a closing balance date between 1 October 2019 to 30 December 2019, will be determined by the closing balance date instead of the date of the general meeting approving the annual accounts. These companies will have to file their CIT return within 7 months after the first day of the month following the balance closing date (or the next working day if the deadline is in the weekend or on a public holiday).
All companies having a closing balance date on 31 December 2019, have to file the CIT, legal entity tax and CIT-NR tax returns up to September 24, 2020.
2. Automatic deferral of the corporate income tax payment deadline
As for the payment of corporate income tax, non-residents’ tax and legal entity tax, an additional period
of 2 months will automatically be granted, on top of the normal payment period and without charging
interest for late payment (assessment year 2019). In addition to this automatic deferral, each taxpayer can
request additional delays, waiver of interests for late payments and/or discounts on fines for non-payment
of unpaid CIT liabilities, assessed prior to 12 March 2020.We refer to the procedure as mentioned above,
which has to be complied with before June 30, 2020.
3. Flexibility concerning the exemption conditions of bad debt provision
The current situation will undoubtedly have an adverse effect on the cash flow and the solvency of some
companies. It therefore seems appropriate to clarify the conditions for exemption of the write-downs on
trade receivables.
In order to be eligible for the exemption, certain conditions provided in Art. 22 to 27, RD/WIB 92 must be met.
One of the conditions states that the probability of the reduction in value for each receivable must be due to
specific circumstances which have occurred during the taxable period and not from a purely general risk.
Circular 2020/C/45 confirms that the crisis caused by the COVID-19 virus can be considered as an exceptional
circumstance justifying the exemption of write-downs on trade receivables.
This applies to companies which have a delay in the payment of these receivables as a direct or indirect
consequence of the measures taken by the federal government. To justify a tax deduction under the existing
tax deduction rules, each doubtful debtor should still be individualized and reported on the tax form 204.
The Belgian tax authorities however announce that they will show flexibility while reviewing the recovery
difficulties for each company debtor whereby the turnover decreased significantly as a result of the
restrictive measures imposed by the federal government.
This clarification will not allow to revise the tax-deductible nature of the write-down on trade receivables as
per 31 December 2019. However, companies with an accounting year-ending after 16 March 2020, can take
into account this flexibility for the CIT prepayment, tax provision and/or tax return filing.
4. Automatic extension of the corporate income tax payment deadline
The exceptional situation also has consequences for Tax Shelter audiovisual works and Tax Shelter
performing arts.
Under these circumstances, the authorities have decided to extend the current term for expenditure of 24
months by 6 months for the performing arts.
For the audiovisual sector, the current term of 18 months (24 months for animation) has been extended by
6 months.
In order to benefit from the measure, it is necessary for the producer to demonstrate that he has suffered
direct damage as a result of the measures taken by the public authorities to combat the coronavirus.
5. Accelerated ruling request for homeworking expense allowance
During the corona crisis, employers can provide a temporary homework allowance to their employees. This
monthly allowance is free of tax and social security contributions and amounts to € 126.94 per month.
In order to meet the above situation, the Ruling Office has taken the initiative to initiate an accelerated
procedure for the reimbursement of expenses for a home office, whereby approval for the payment of the
expense allowance for a home office can be obtained quickly. The abridged application form can be found
on the website of the Ruling Office.
6. Expected measures
The Belgian Government reached a political agreement on the implementation of 2 new supportive measures to support the liquidity and solvency of businesses.
Carry-back principle: businesses anticipating in having losses for FY2020 could offset part of their expected FY2020 ‘Covid-19’ tax losses against the taxable profit of the preceding year 2019. As a result, business can limit or avoid the payment of the FY19 CIT or request for a cash refund of the FY19 CIT prepayments.
Certain companies would be excluded, in particular companies which have executed share buy-backs, dividend distributions and/or capital reductions in 2020.
Reconstitution reserve: A company can recognize a tax-exempt reserve at the end of the taxable period 2021 and following 2 years. The reconstitution reserve would be tax-exempt up to maximum the Belgian accounting operating loss over FY 2020 and an absolute maximum of 20 million EUR. These principles still need to be refined during the legislative phase / parliamentary works.
New tax shelter for SME’s suffering from the Covid19-measures.
Increased investment deduction of 25% for investments between March 12 and December 31, 2020.
Increased deduction of costs relating to events and catering to 100% until December 31, 2020.