Mazars Info October 2019

LEGAL

UBO registration – Administrative tolerance: no fines until December 31, 2019

The UBO (Ultimate Beneficial Owners) registration deadline of September 30, 2019 was approaching fast. The FPS Finance is however well aware of the administrative challenges posed by this new UBO registration for the companies and associations concerned as well as for its own administrations.

In case of no proper registration or incomplete / incorrect registration, fines can be imposed between 250 EUR and 50.000 EUR.

On September 23, 2019, the Belgian authorities confirmed that there will be no additional postponement of this deadline, but Belgian authorities will not apply any sanctions during the period between September 30, 2019 and December 31, 2019.

For more information with respect to the UBO registration itself, we refer to our previous newsletters.

VAT

Belgian VAT consequences in case of a hard Brexit

As it seems more likely that a hard Brexit will take place on October 31, 2019, you can find below a short overview of the most important Belgian VAT consequences.

• Appointment of a fiscal representative: As of 01/11/2019, taxpayers of the United Kingdom (UK) will no longer be eligible for direct VAT identification in Belgium. This implies that a fiscal representative, established in Belgium, is required to register in Belgium for VAT purposes. Moreover, UK entities, registered by means of a direct VAT registration, will be compelled to file a request to change the status to fiscal representative.
• Economic Operator Registration and Identification (EORI) number: British taxpayers carrying out transactions on Belgian territory such as import and export, must have an EORI number for customs formalities. As long as the UK remains a member of the European Union (EU), the UK EORI number can still be used. In the meantime, it is recommended to apply for a Belgian (or another Member State) EORI number, which will be activated as soon as the UK becomes a third country and is no longer part of the EU. As of that moment, the party will be able to use the new EORI number in all Member States of the EU.
• ET-14000 license: Once the UK becomes a third country, the party importing goods in Belgium will be subject to Belgian VAT. However, there is the possibility in Belgium to apply for a VAT deferment license for import to limit the pre-financing of import VAT. The license allows the taxpayer not to pay the VAT amount directly at the moment of import, but to include the VAT payment in the periodical VAT return at the same time, the VAT amount is deductible (reverse charge). This results in a neutral transaction in the VAT return, as there is no advanced payment of VAT. Upon granting of the license, the custom clearing agent will not charge VAT at import, but only customs duties (if applicable).
• VAT refund of 2019 Belgian/British VAT: As of 01/11/2019, Belgian companies, which incurred UK VAT in 2019, will be compelled to file the request for foreign VAT refund before October 31, 2019. Even though the "normal" deadline for requesting the 2019 UK VAT is September 30, 2020, the request has to be filed before the moment of a hard Brexit. Otherwise, the UK VAT authorities will no longer accept the request.

PERSONAL TAX

Entitlement to entire tax deduction in Belgium in case of exempt foreign income

In the past, the Belgian tax deduction for children at charge was always attributed to the spouse with the highest income in case of a joint tax return.

In case the spouse with the highest income, received foreign income that was exempted (with progression reserve) from Belgian income taxes, the tax deduction for children at charge could not be benefitted from and was thus lost.

Due to a legislative amendment followed by an administrative tolerance of the Belgian tax authorities, the most beneficial tax assessment for the couple determines which partner will be entitled to the tax deduction for the children at charge.

The same question was raised for other personal and family related tax deductions / advantages (i.e. gifts, day care expenses, service vouchers,…).

The Court of Appeal in Antwerp pronounced a judgement on November 23, 2018 in which it states that these personal and family related deductions cannot be lost due to the fact that the family income is partly exempted from taxes in Belgium. Otherwise, it is a violation of the freedom of movement of people. The (personal) tax deductions should be granted entirely by the residence state.

This is good news for couples where one partner is in an international employment situation. Based on the aforementioned judgement, they can request for a mandatory exemption from taxation for the unfairly not-granted tax deductions for the past 5 years.

LABOUR LAW

Illegal posting of workers: extension of powers of the inspection department of the National Social Security Office (NSSO)

As from September 21, 2019 the powers of the inspection department of the NSSO have been extended with regard to the illegal posting of foreign workers in Belgium.

Before, only the inspection services of the Federal Public services Employment, Labour and Social Dialogue could interfere in case of (illegal) posting of workers in Belgium.

In case employees (regardless whether the employees are assigned from an EU or non-EU country) are assigned to Belgium, they are subject to the Belgian terms and conditions of employment that are sanctioned by criminal law. In practice, this means that almost the entire Belgian labour legislation (termination rules excluded), including all generally binding collective agreements, is applicable to assigned employees as of day one of their assignment to Belgium.

Moreover, the Belgian principles related to posting of workers laid down by the Act of 24 July 1987 on temporary work, temporary agency work and hiring out of workers for the benefit of users need to be respected. In case of a violation of these principles, the user and the person who hired the workers out are jointly liable for payment of remuneration, compensation, social benefits and social security contributions.

In case of a violation of these principles, only the inspection services of the Federal Public services Employment, Labour and Social Dialogue could act on the compliance.

As from now on, also the inspection department of the NSSO can take actions in case of illegal posting of foreign workers and more specifically related to the joint liability for payment of social debts in Belgium.

Since increasing actions were already announced, this extension of powers shows the high importance of compliance with the regulations governing working conditions by foreign companies which undertake work in Belgium by hiring out their own personnel to users.

In this respect the specialists of our legal team can provide you with advisory services. Please contact us, in case you would like our assistance.

KEEP IN MIND!

VAT

• Reclaim foreign VAT: September 30, 2019
• VAT return Q3/2019 / September 2019: before October 20, 2019

CORPORATE INCOME TAX RETURN

• Prepayment corporate income tax (Q3 2019): October 10, 2019
• Corporate income tax return – companies (Balance date: 31/12/2018): postponed to October 10, 2019

Please be aware of the fact that for late or no filing of the income tax return, penalties could be imposed between 25% and 200% depending on the number of infringements.

PERSONAL INCOME TAX RETURN

• Personal income tax return – Belgian residents

         o Via proxyholder: October 24, 2019

• Personal income tax return – Belgian non-residents

         o On paper: November 7, 2019

         o Via proxyholder: December 5, 2019

Our editors have compiled this newsletter with the utmost care. However, they are not responsible for incorrect or incomplete information.