Mazars Info February 2023

ESTATE PLANNING

Renovation obligation on transfers of immovable property

In the context of the global warming and the climate change the Flemish government decided to further focus on the sustainability of the immovable properties. As from January 1, 2023, a renovation might be obliged when residential properties get transferred, equal to the obligation that already entered into force for non-residential buildings.

Renovation obligation on transfer

A residential immovable property that gets transferred as from the January 1, 2023, must have at least an energy label D. If the energy label of the immovable property is worse than D, the acquirer of the immovable property has the obligation to renovate the immovable property within 5 years to ensure that the property meets at least the requirements for an energy label D.

Long term vision
Until 31/12/2027 the energy label that needs to be reached is D. In the future this will systematically be tightened.

Eventually, homes purchased as from 1/1/2040 will have to meet energy label A (apartments as from 1/1/2045).

Which transfers?
The renovation obligation applies to a notarial transfer of full ownership and to the establishment or transfer of a leasehold or surface right.

The notarial transfer of full ownership covers many actions. Not only the sale of an immovable property is meant, but also:

• the donation;
• the exchange of real estate;
• the contribution to a company; and
• the contribution to a matrimonial community of property.

Only transfers of full ownership must meet the renovation obligation. Transfers of the bare ownership or usufruct are not targeted.

Exceptions

The following exceptions are - among others - mentioned in the law:

• transfer of the shares of a company that owns real estate;
• in case a company merges or splits;
• inheritance;
• transfer in the context of a divorce or termination of cohabitation, but only if one of them has
• and maintains his/her principal residence there; and
• the acquired property will be demolished within 5 years.

Term

The term of 5 years begins as from the date of the notarial deed of transfer / establishment of the leasehold or surface right.

Who needs to renovate?
The renovation obligation rests on the acquirer.

Purchasing an immovable property subject to this obligation
There is a chance that you acquire an immovable property that is subject to a renovation obligation. In that case the obligation passes to the acquirers without any extension of the term.
If the second transfer falls within the scope of this renovation obligation as well and more stringent rules entered into force at that time, the stricter rules associated to this second transfer must equally be fulfilled. This, within a new term of 5 years.

Sanctions
The Flemish Energy and Climate Agency is authorised to issue administrative fines between € 500 and € 200.000 if the renovation obligation is not met.
The fine does not release you from the obligation to renovate. The agency will set a new deadline by which the obligation must be met.

CORPORATE INCOME TAX

DAC-7 EU Directive for Digital Platform Operators implemented in Belgian tax law

The EU Directive 2021/514 (so-called “DAC-7”) on administrative cooperation introduces reporting obligations for digital platform operators. DAC 7 has been implemented into Belgian tax law (art 321quater-decies BITC92) by the act of 21 December 2022 and entered into force as of 1 January 2023.

DAC 7 introduces a reporting obligation for digital platform operators – both located within and outside the EU - to disclose the revenue that sellers and service providers obtain via their digital platforms with the Belgian Tax Administration. The following activities are specifically targeted: the rental of real estate, the provision of personal services, the sale of goods and the rental of vehicles.

The reported information will be exchanged with all tax authorities of the different EU Member States. Digital platforms established outside the EU will be required to register in an EU Member State in order to comply with this EU-Directive. The first DAC7-notification should be submitted by 31 January 2024 and applies to all transactions for calendar year 2023.

This should not be a total ‘gamechanger’ in our Belgian landscape, since Belgium anticipated DAC 7 with the introduction of a new Belgian DAC7 ‘light’ reporting obligation for digital platforms facilitating the provision of services, which obliges electronic operators (via a fiscal representative) to submit an annual form for the first time by 31 March 2022.

The DAC 7 Directive also introduces the possibility for tax authorities to conduct joint cross-border tax audits.

EU Directive on minimum taxation for MNEs (“Pillar 2”) published

The EU Directive 2022/2523 on a global minimum taxation for multinational enterprise groups has been published in the EU Journal on 22 December 2022. With this directive, the EU is implementing "pillar 2" of the work plan agreed by the countries of the so-called OECD/G20 Inclusive Framework on BEPS in the context of the fiscal challenges of the digital economy.

The second pillar, also referred to as “GloBE” rules (“Global Anti-Base Erosion”) applies to multinational enterprises with a consolidated group revenue exceeding € 750 million in at least two of the four fiscal years immediately preceding the tested fiscal year. An effective tax rate of 15% for each jurisdiction of the multinational group will be required to avoid any additional taxation.

The Pillar 2 Directive must be implemented into Belgian tax law by 31 December 2023 to become effective as of 1 January 2024. This new legislation will apply for taxable periods ended as per 31 December 2023 onwards. The Belgian tax administration has not expressly commented on this topic, but useful clarifications can be found in the long-awaited OECD
Administrative Guidance on the Pillar 2 Model Rules, released on 2 February 2023.

MNEs should start today to anticipate the significant additional compliance burden and review organisational readiness.

VAT

ECJ 8 december 2022, c-378/21, P GmbH v Finanzamt Österreich – Request for preliminary ruling

Where a taxpayer is subject to VAT, he acts as a tax collector from its customer and eventually transfers it to the State. This role can be risky in case of the application of an incorrect VAT rate as per article 203 of the Council Directive 2006/112/EC VAT is due by any person who mentions it on an invoice.

The question addressed to the Court concerns an Austrian company which operates an indoor complex of play space for children. The taxpayer applied 20% VAT on the admission fees to the facility. However, such services are actually subject to the reduced rate of 13 % in Austria.

The company asked the Austrian tax authorities to recredit the excess VAT. Such adjustment was declined on the ground that the company owed the higher VAT as a 20% rate was stated on the invoice and that the company would be unjustly enriched. The case was brought in front of the Federal Finance Court which raised a request for a preliminary ruling to the ECJ.

The question raised was whether article 203 of the Council Directive 2006/112/EC, according to which VAT is payable by the issuer of the invoice, must be interpreted as meaning that a taxable person who has supplied a service and who has stated on the invoice an amount of VAT calculated on the basis of an incorrect rate is liable to pay that VAT.

The Court looks at the nature of the activity of the company for which the customers were exclusively final consumers who were not entitled to deduct VAT. In this case, for the Court, there is no risk of tax revenue.

The Court answers that article 203 is intended to apply in the situation where the VAT has been wrongly charged and where there is a risk of loss of tax revenue since the recipient is entitled to deduct VAT.

As a consequence Article 203 of the Council Directive 2006/112/EC must be interpreted as meaning that a taxable person who has supplied a service and who has stated on the invoice an amount of VAT calculated on the basis of an incorrect rate is not liable if there is no risk of loss of tax revenue on the ground that the recipients of that service are exclusively final
consumers who do not have a right to deduct input VAT.

Mazars in Belgium can provide support to ensure VAT compliance in the issuance of invoices.

GLOBAL MOBILITY SERVICES

Changes in Belgian tax procedure as from 2023 tax year

Introduction

Following the law of 20 November 2022 (published on 30 Nov. 2022), the Belgian legislator changed various delays in the tax procedure regulations. These new rules are already applicable (as from the tax year 2023, so on income received in 2022).

Extension of tax control deadlines

Following the new law, the tax authorities now can still audit and reassess the tax due:

• 3 years after the introduction of the tax return (classic statute of limitation : unchanged) ;
• 4 years after the introduction of the tax return if the tax return was lately introduced or was
• not introduced at all ;
• 6 years after the introduction of the tax return if the tax return is considered as complex (i.e.
• foreign income exempted, salary split situation, …) ;
• 10 years after the introduction of the tax return if tax fraud is suspected by the tax authorities
• or if the taxpayer is the owner of legal structure covered by the Cayman tax (trusts, or any
• other foreign legal structure taxed at a lower rate than 15% abroad).

Collaboration with the tax authorities and retention of documents

Equally, the delay of retention of tax documents is now extended to ten years for these exceptional cases as the tax authorities can always invoke that they suspect tax fraud (they however must explain why they consider this state of facts).

Beside that, tax authorities now tend to force the taxpayers to collaborate with them during a tax investigation. Tax authorities will be able to summon the taxpayer considered as noncollaborative and request in urgency to the judge, to sentence him to a daily penalty if he does not cooperate.

One good news !

Finally, certainly one evolution is favorable to the taxpayer in this new law as the delay of lodging a claim (‘bezwaarschrift” or “reclamation”) against a tax bill is extended from 6 months to one year.

However, as the delay of payments of tax bills is limited to 2 months, the taxpayer is still advised to pay the “incorrect tax due” to avoid tax collection measures and late payment interest from the tax authorities before the situation is eventually corrected.

Our team remains at your disposal in case of questions or if you require assistance and will keep you updated of any further developments.

GLOBAL MOBILITY SERVICES

New reporting obligation in France for property owners in 2023

Introduction

Although the “taxe d'habitation” has been abolished for principal residences, it remains applicable for other premises (secondary residence, rental accommodation).

To determine in detail which taxpayers are still liable for the “taxe d'habitation” or the tax on vacant dwellings, the French tax authorities are asking all property owners to make an additional declaration before 1 July 2023.

Who is concerned?

All persons owning a property for residential use in France:

• Individuals or companies (in particular SCI);
• French tax residents and non-residents.

What are the reporting procedures ?

Owners must, for each of their premises, indicate whether they occupy them and, if they do not occupy them, specify the identity of the occupants (situation on 1 January 2023).

How to declare?

The declaration will be made directly on the owner's personal or professional space, accessible on the impots.gouv.fr website, under the heading "Manage my property".

What is the declaration deadline?

The deadline is 30 June 2023. Thereafter, only a change of situation will require a new declaration.

What is the penalty for failure to comply?

In case of failure to declare or in case of inaccuracy of the declaration, the fine will amount to 150 € per premise. This fine will not be applicable when another higher fine or increase is applied for the same facts.

This article was written in collaboration with our French colleagues : Mrs. Anna Vissuzaine and Mr. Mike Hoffman from the Mazars Strasbourg office.

Our team assisted by our Mazars France colleagues remains at your disposal in case of questions on this topic.

LEGAL

Pre-contractual information duty in B2C context

On 18 June 2021, the Belgian Court of Cassation handed down an interesting judgment regarding the pre-contractual information obligation on sales terms in the relationship with a consumer.

The Code of Economic Law provides that before a consumer becomes bound by a contract, the company shall provide him with information, including where appropriate, the conditions of sale, taking into account the consumer's expressed need for information and the use communicated or reasonably foreseeable by the consumer (art. VI.2, 7° CEL).

According to the Court of Cassation this obligation implies that the consumer must prior to the conclusion of the contract effectively be given knowledge or, at least, have the reasonable opportunity to take note of the general contract terms and conditions.

Although, in a B2C context, it is in principle sufficient that the general contract terms appear on the reverse side of a purchase order (or any other contract document), this does not apply when the terms are of an unusual or excessive nature.

The Court of Cassation held that:

"the consumer may, as a rule, be presumed to have a reasonable opportunity to take note of the general contract terms and conditions when they appear on the reverse side of a contract document referred to on the front. This cannot be assumed when the contract terms are unusual or excessive."

In this particular case, the general terms and conditions included an excessive notice clause, which provided for a termination fee equal to 30 pct. of the price. This clause which was declared non-binding due to a violation of the pre-contractual information duty in B2C context.

Given the aforementioned judgment, it may thus be useful to have your general terms and conditions of contract and, if necessary, actively inform consumers about them.

Retention period for books and records extended to 10 years

The Act of 20 November 2022 containing various tax and financial provisions, extended the tax examination and assessment periods with the aim of giving the tax authorities more time to verify returns.

As a result, with effect from 1 January 2023, the deadlines imposed by the VAT Code and in the Income Tax Code 1992 for the preservation of books and records were extended. Whereas a taxpayer was required to keep its books and records for 7 years or financial years, he must now keep them for 10 years or financial years following the taxable period to which they relate.

In our previous newsletter, we further discussed the tax implications of this Act.

KEEP IN MIND THE DEADLINE!

VAT

• VAT return January 2023 : February 20, 2023

Personal income tax / Corporate income tax

• Forms 325.10 & 325.20 (form 281.10 & 281.20): February 28, 2023
• Request of reimbursement or transfer of prepayment (personal/corporate) for income taxes (by preference via MyMinfin : March 31, 2023
• Request file for increased investment deduction claims for FY 2022 investments (energy-friendly investments) from the Regional authorities by March 31, 2023
• Mixed VAT-payer with quarterly VAT return filing that applied the general VAT-deduction rule but wants to switch to the effective use method as from 1 Jan 2023 : notification by MyMinfin by March 31, 2023.