Mazars Info May 2023
Mazars Info May 2023
GLOBAL MOBILITY SERVICES
BELSPO notification for R&D wage tax exemption: stricter conditions published
Companies can apply the wage withholding tax reduction for research and development in case certain conditions are met, including the registration of the R&D-activities with Belspo (Federal Science Policy Office). This wage tax reduction implies an exemption to transfer 80% of the wage withholding tax withheld through payroll to the Belgian authorities. Currently, the Belsporegistration must be fulfilled at the moment that the reduction is applied, regardless of whether the R&D-project has already started.
Following a legal decision by the Court of Cassation of January 6, 2023, the Belgian tax administration is tightening its view on the timing of the Belspo-registration requirement of the R&D-project.
From August 1, 2023, the Belspo-registration of the R&D-project must be done before the project start date. As a result, the reduction will only apply to personnel employed in R&Dprojects that were registered with Belspo before the start date of the project or program.
For R&D projects/programs already in progress on August 1, 2023, 2 tolerances apply:
- If the R&D project/program is not registered before August 1, 2023, the 80% wage tax exemption can never be applied to the concerned project/program;
- If the R&D project/program will be registered or was already registered before August 1, 2023, the 80% wage tax exemption remains valid (regardless whether the notification happened before the start of the project or during the project).
This new point of view from the Belgian tax authorities following the Court of Cassation judgement is confirmed in a new administrative circular letter of April 27, 2023 (2023/C/49).
For companies starting a new R&D-project as of August 1, 2023 for which they wish to apply the 80% wage withholding tax reduction for R&D, the project must be fully registered with Belspo before its actual start date.
This new point of view will create difficulties for companies in determining exactly when a R&D project will start to register the new project/program in time with Belspo.
Failing to meet the new notification requirements could have significant consequences for employers applying the 80% wage tax exemption. As the burden of proof lies with the employer where a tax benefit is concerned, failure to prove that any R&D project/program notified on or after 1 August 2023 had yet to start at the time of the notification will result in a rejection of the whole exemption related to that project/program, probably sanctioned with wage tax increase of minimum 10%.
Given the current tax audit wave focusing on employers applying wage tax exemptions, we recommend all employers potentially affected to rigidly assess their actual BELSPO notification process and possibly take immediate actions.
BELSPO notification for R&D wage tax exemption: stricter conditions published
In case you want more information regarding this topic or any other wage tax incentives, please reach out to your Global Mobility service team contact at Mazars.
CORPORATE INCOME TAX
Forms 281.50 – 29 June 2023 deadline approaching
Each Belgian company or permanent establishment annually has to annually report all payments related to commissions, service fees, benefits in kind, commercial discounts granted by separate credit notes, etc. on specific tax fee forms 281.50.
The forms have to be drafted per calendar year, irrespectively the closing date of the financial year. For payments made during calendar year 2022, the ultimate filing deadline is 29 June 2023.
As from income year 2021, the scope of this reporting obligation has been significantly reduced:
No fee form 281.50 should (amongst other tolerances) be filed if :
The cost or benefit relates to goods or services provided by a taxpayer who is based in the European Economic Area (European Union + Norway + Iceland + Liechtenstein) AND an invoice or other equivalent document for the payment is established according to the applicable VAT legislation. The amount of the cost or the benefit does not exceed the amount of 250,00 euros per recipient per calendar year.
Non-compliance with this reporting obligation could trigger a separate tax assessment (of 100% or 50% depending on the beneficiary) the so-called “secret commission tax”, on the nonreported / belatedly reported amounts.
The secret commission tax is not tax deductible. Moreover, no tax attributes can be offset against this separate tax assessment (“effective tax cash-out”).
More detailed information on the application conditions (qualifying fees, completions of boxes, etc.) can be found on the tax administration’s website
Please reach out to your service team contact in case you would still have to comply with this tax reporting obligation as the filing date is approaching fastly.
ECJ 28 February 2023, C 695/20, Fenix International Ltd – Request for preliminary ruling
The online platform economy has brought numerous opportunities in trade but also raised some issues on the correct application of the VAT rules. A recent decision by the European Court of Justice again illustrates this.
Fenix, a company registered for VAT purposes in the United Kingdom, operates an online content subscription service under the name “Only Fans”. Creators can upload adult content whilst subscribers, the so-called “Fans”, can watch this content in exchange for payment to the company. The company forwards the amount to the creator and takes a 20% commission on
the subscription price. Thus, Fenix invoices the corresponding amount to the creator and accounted for VAT on it.
HMRC (i.e. the UK tax administration) sent Fenix tax notices for the VAT payable. They considered that Fenix had to pay VAT on the entire amount received from a fan and not only on the 20 % of this amount, which it was charging as remuneration.
By virtue of article 28 of the EU Council Directive 2006/112, as amended by EU Council Directive 2017/2455 of 5 December 2017, where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.
To further clarify, article 9a (1) of Implementing Regulation No 282/2011 provides that for services supplied through an interface or a portal such as an online platform, the online platform shall be presumed acting in his own name but on behalf of the provider of those services.
These provisions create the legal fiction of two identical supplies of services provided consecutively. Under that fiction, the operator (Only Fans), is considered to have, firstly, received the services in question from the creator on behalf of whom it acts, before providing, secondly, those services to the fan himself.
Fenix filed an appeal before the referring court. The company argued that article 9a (1) of Implementing Regulation No 282/2011 was invalid as it went beyond the sole implementation of Article 28 the EU Council Directive 2006/112. The court raised a request for preliminary ruling.
The ECJ has ruled that there was no element of nature to affect the validity of Regulation No 282/2011, Consequently, the Court contends that Only Fans was acting as an online intermediary and has to charge VAT on the entire amount received from a fan.
Our VAT specialist can provide assistance on the potential impact of the decision for your online platform activities.
GLOBAL MOBILITY SERVICES
Following the 2022 energy crisis and the recently approved 2023-2024 wage norm of 0%, the Belgian government decided to introduce a new exempted premium for employees in 2023 to nourish the Belgian economy.
1) What ?
On 28 April 2023, the Belgian government published a royal decree which allows companies that realized high or very high profits in 2022 to grant to their employees a one-shot exempted premium in 2023, known as a "purchasing power bonus" (“koopkrachtpremie” in Dutch or “prime de pouvoir d’achat” in French).
The companies can freely grant this premium to their employees, but will need to conclude a collective labour agreement at sectoral or company level to officialize this grant. Exceptionally, when no collective labour agreement can be concluded, an individual agreement with each employee can be drafted.
The amount of the premium granted by an employer who gained very high profits may not exceed 750 EUR per employee. For companies with a high profit, maximum 500 EUR can be granted. The conditions to determine “high profits” and “very high profits” should be decided at sectoral level where needed. If not, the company must justify that it had good results in 2022.
3) Tax and social security treatment
The amount of the premium will be exempted from the notion of remuneration for social security and wage tax purposes. However, a special (employer) social security contribution of 16,5% will be due.
The amount of the premium, increased with the special social security contribution, will be tax deductible in the hands of the employer.
4) Practical information
The premium will be granted as a consumption voucher (electronically or exceptionally on paper) with limited validity. Consequently, the premium cannot be paid out in cash to the employee.
The purchasing power premium can only be issued from June 1, 2023 until December 31, 2023 and can be spent until 31 December 2024. They can only be used for the payment of food (restaurant or stores) and for the purchase of products and services of an ecological nature.
If you are interested to implement such premium in your company, please reach out to your Mazars contact.
Legislative proposal with regard to a Central Register of Disqualified Directors
On 27 April 2023, a legislative proposal with regard to the introduction of a Central Register of Disqualified Directors was approved by the plenary of the Chamber of Representatives.
This proposal aims to partially transpose Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019 amending Directive (EU) 2017/1132 with regard to the use of digital tools and processes in the context of company law (hereinafter "Directive 2019/1151").
The proposal provides a legal framework for a Central Register of Disqualified Directors. The Register should be an additional tool against fraudulent conduct or other misconduct by denying the appointment as a director of a company of a person with a criminal or civil ban from performing management and control functions. Now, a disqualification as a director remains
often dead letter, due to lack of possibility of control.
The Central Register of Disqualified Directors will be accessible to a number of specifically listed government bodies, such as the Federal Public Service for Justice, the National Social Security Office and the Crossroads Bank of Enterprises, which will have full access. A restricted access will be granted to all citizens, which is limited to some minimum information, specifically the first name and surname of the convicted person, or, in case of a legal person, their name, legal form and company number, as well as the start and end date of the prohibition. The access for all citizens should help them avoid dealing with rogue entrepreneurs.
The implementation of Directive 2019/1151 will also allow the FPS Justice to answer questions about director disqualifications from other EU member states and vice versa.
The Directive's transposition deadline expires on 1 August 2023. This is also the expected date of entry into force of the new law.
CORPORATE INCOME TAX
Biztax platform opened since 28 April 2023 - Minor changes to the 2023 corporate income tax return form itself only
The corporate income tax return for tax assessment year 2023 was published in the Belgian Official journal on April 14, 2023. Hereby we would like to give a brief overview of the changes to the new tax return compared to last year’s Biztax CIT return.
In the box taxable reserves, two new codes have been introduced as a response to the new tax shelter for video games. In the section "adjustments in more of the initial state of reserves" the code 1066 has been added. This is where taxpayers need to indicate whether or not there is a final tax exemption related with the tax shelter for video games.
In the tax-exempt reserved earnings section a new code 1122 is included intended for the declaration of provisionally exempt earnings.
In the "disallowed expenses" (“VU”en”/ DNA”) box, there are three new codes.
- The 1st new code is the code for annual fees on credit institutions, collective investment schemes and insurance companies (1245).
- The 2nd new code 1246 was introduced in response to the tax on aircraft boarding.
- The 3thrd code 1247 was added because some companies can qualify for a tax credit. This is possible when they pay an increased flat-rate expense allowance to their employees for service movements that meet certain conditions. The increase here is then temporarily charged to the treasury and is therefore not deductible as a professional expense.
In the disallowed expenses box, there is also a code that has a changed heading. Code 1225 has been changed from "Unaccounted expenses" to "Unaccounted expenses and disguised capital gains," to clarify that disguised capital gains should also be included in disallowed expenses.
In the offsetable losses box a new entry has been added namely “previous losses of foreign origin that have become final” (code 1726). This will apply only if losses from abroad are only deductible if they were incurred in an EEA member state and are permanent.
Some codes have been deleted due to the extinction of corona measures, a.o.:
- Tax credit for unrecoverable expenses (code 1847)
- Increase in the taxable base to neutralize the decrease in the ordinary rate in case a reserve was exempted in the previous taxable period due to the COVID-19 pandemic (code 1266)
- Non-recoverable expenses subject to a COVID-19 pandemic tax credit (code 1267)
- backward loss relief (code 1128)
Some codes have been removed because the related tax rules no longer apply:
- Deletion of codes following the deletion of the mobility allowance (codes 1234, 1482)
- Deletion of the heading inclusion of certain exempt reserves (codes 1416, 1483)
The Biztax filing platform is now available for the tax assessment year 2023:
- The filing deadline for returns with balance sheet dates from 31 December 2022 to 28 February 2023 is 9 October 2023.
- If your company already files the CITR return by 8 September 2023 at the latest and it gives rise to a tax refund, the tax administration will give it priority treatment. As a result, you will receive the refund, barring exceptions, no later than the end of December 2023.
KEEP IN MIND THE DEADLINE!
- VAT return (Monthly) April 2023: May 20, 2023
Corporate income tax
- Forms 281.50 : 29 June 2023