INCREASED BONIFICATION PERCENTAGES FOR ADVANCE TAX PAYMENTS IN PERSONAL AND CORPORATE INCOME TAX
Because a lot of companies and self-employed individuals are suffering from low liquid assets, the federal government has decided to increase the bonification percentages for Q3 and Q4 advance tax payments to avoid that those taxable persons are being ”penalized” due to insufficient Q1 (10 April 2020) and Q2 (10 July 2020) advance CIT prepayments for the current FY20 (assessment year 2021).
Thanks to this support measure to help companies in their cash management, postponing FY20 advanced CIT pre-payments to 10 October becomes therefore less disadvantageous.
Companies can benefit from a higher tax credit for advance tax pre-payments made in the 3rd and 4thquarter of 2020. The tax credit percentage for the 3rd quarter of 2020 (10 October), is increased to 6,75%, instead of 6%. The tax credit percentage for the 4th quarter (20 December), is increased to 5,25%, instead of 4,5%. Only companies that do not distribute dividends or perform a capital reduction between March 12 and December 31, 2020 can benefit from these higher tax credit percentages.
Self-employed individuals subject to personal income tax can benefit from higher tax credit percentages for advance tax pre-payments. The tax credit percentage for the third quarter of 2020, is increased to 2,25%, instead of 2%. The tax credit percentage for the fourth quarter of 2020, is increased to 1,75%, instead of 1,5%.
Hereafter, you can find a summary of the percentages:
Prepayment period | Personal Income tax | CIT (without dividend) | CIT (with dividend) |
Prepayment Q1 | 3% | 9% | 9% |
Prepayment Q2 | 2,5% | 7,5% | 7,5% |
Prepayment Q3 | 2,25% | 6,75% | 6% |
Prepayment Q4 | 1,75% | 5,25% | 4,5% |