Mazars Info October 2021

LEGAL

Digitisation of Belgian Company Law

On 15 July 2021, the Law amending the Code on Companies and Associations and the Act of 16 March 1803 regulating the notary profession, and containing various provisions as a result of the transposition of Directive (EU) 2019/1151 of the European Parliament and the Council of 20 June 2019 amending Directive (EU) 2017/1132 with regard to the use of digital tools and processes within the framework of company law (hereinafter the “Law on Digitisation of Company Law”), was published in the Belgian Official Gazette.

This law introduces the possibility of digital incorporation of certain legal entities, the mandate database and also makes some minor amendments to the Code on Companies and Associations (hereinafter “CCA”).

Digital incorporation
Notaries are now given the possibility to remotely execute authentic incorporation deeds, so that the founding parties no longer have to physically appear before the notary. Only if the notary can state reasons for suspecting identity fraud, or if this is necessary to verify the rules regarding the founders’ legal capacity, the notary may still require the physical presence of a party.

It is not possible to use the option of digital incorporation if the incorporation involves a contribution in kind.

Mandate database
Since the Crossroads Bank for Enterprises currently only mentions the identity of the directors, but not their specific powers of representation, the Law on Digitisation of Company Law also introduces a statutory mandate database. In this database, it will be possible to check the representation powers, as well as any change or cancellation of powers of directors.

The mandate database is a system that can be consulted by the public, in which directors are assigned a qualification, for example on the basis of sole representation clause, two-signature clauses, etc.
The mandate database is not yet operational. This will be announced by a notice in the Belgian Official Gazette.

Various amendments to the CCA
Finally, the Law on Digitisation of Company Law brings some minor changes to the CCA:
Alignment of the terminology used for the electronic signature as used in the Civil Code, and improvement of some cross-references;
Clarification that the filing of the deed of incorporation and certain amendment deeds of the international non-profit association and of the foundation under name can only take place after publication of the Royal Decree for recognition and approval, respectively;
Shortening of the legal deadlines for filing the deed of incorporation with the court registry and the deadline for publication in the Annexes to the Belgian Official Gazette in the event of online incorporation.

PERSONAL INCOME TAX

Flexibility of the double taxation regulation for Belgian cross-border workers in Luxembourg

Based on article 15 of the Double Tax Treaty concluded between Belgium and Luxembourg (hereinafter “DTT BE-LUX”), the professional income of an employee is, in principle, taxable in the country where the professional activity of the employee is in fact exercised, i.e. the state of employment. For Belgian cross-border workers, this means that their remuneration is in principle taxable in Luxembourg.

However, the State of residence, in this case Belgium, remains competent to levy taxes if all of the following conditions, stated in article 15 §2 of the DTT BE-LUX, are cumulatively fulfilled:

• The employee stayed in Luxembourg for a maximum of 183 days during a 12-month period, which started or ended within the relevant calendar year and;
• The remuneration is paid by or on behalf of an employer that is not established in Luxembourg and;
• The remuneration is not borne by a permanent establishment or a fixed base which the employer holds in Luxembourg.

Consequently, if a Belgian tax resident physically works more than 183 days in Luxembourg or works for an employer that is based in Luxembourg, the income is taxable in Luxembourg for the work performed in Luxembourg. However, each working day the employee physically performs outside of Luxembourg would still remain taxable in Belgium, the State of residence.

As the above would significantly block the flexibility of international employment between Belgium and Luxembourg, an exception to the abovementioned principle has been introduced in 2015 by mutual agreement between the countries that allows a Belgian resident to work outside Luxembourg for up to 24 days per year while remaining exclusively taxable in Luxembourg (hereinafter the so-called “24 days rule”. If the 24-days threshold would be exceeded, Belgium will again be competent to levy taxes on the corresponding income related to the days spent outside Luxembourg as from day one.

On 31 August 2021, a new mutual agreement has been concluded between Belgium and Luxembourg that foresees in an expansion of the so-called “24-days rule”, due to the incorporation of telework in a lot of companies after the COVID-19 crisis. Under the new agreement, a Belgian tax resident will now be able to carry out his activities outside Luxembourg, his usual State of employment for a period of 34 days while remaining fully taxable in Luxembourg (and vice versa for a Luxembourg tax resident that is a cross-border worker in Belgium).

This measure will enter into force as from income year 2022.

CORPORATE INCOME TAX

New draft tax law stimulating the green mobility agenda

On 14 September 2021, the federal government submitted the draft law adapting the fiscal treatment of company cars to stimulate the green mobility agenda, to the Chamber. The main principles of this draft law can be summarized as follows.

Changes in deductibility of car expenses
Since assessment year 2021 (financial years starting as from 1 January 2020), The deduction of company car expenses varies from 40% (for cars with a CO2 emission higher than 200g/km) to 100%, depending on the CO2- emission level and the fuel type. The draft law introduces a drastic reform of this scheme in several steps, both impact polluting cars (i.e. any car with a CO2-emission higher than 0g/km) and zero-emission cars.

Polluting company cars
First, as from assessment year 2024 (financials years starting 1 January 2023), the deduction of fuel costs, petrol as well as diesel, will be capped at 50% for hybrid vehicles purchased, leased or rented as from 1 January 2023, to encourage the use of the electric motor of these vehicles.

As of assessment year 2026, the 40% minimum and 100% maximum deduction percentage will be abandoned for vehicles acquired between July 1st, 2023 and December 23rd, 2025. For vehicles with a CO2 emission above 200gr/km this may lead to deduction percentages lower than 40% whereas the maximum deduction percentage will be capped at 75%.

As from assessment year 2027, polluting car expenses will be fully disallowed. However, the rather drastic nature of this measure is mitigated by 1) a grandfathering rule ensuring the continuing application of the current deduction scheme for vehicles acquired, leased on rented before July 1st, 2023 and 2) a phase-out period for vehicles acquired, leased or rented between July 1st, 23 and December 31st, 2025, abandoning any minimum deduction percentage (50% or 40%) and gradually decreasing the maximum deductibility from 75% to 0% over the course of the next three assessment years. In other words, the full disallowance of car expenses only applies immediately for polluting vehicles acquired after January 1st, 2026 respectively as from assessment year 2029, for polluting cars acquired between July 1st, 2023 and December 31st, 2025.

Zero-emission company cars
The deduction of car expenses for zero-emission vehicles will follow a similar pattern. Zero emission company cars, purchased before the first of January 2027 will remain 100% tax deductible. For zero-emission cars purchased after this date, this percentage will be gradually reduced to 67,5% by 2031. Therefore, in order to know the applicable deduction rate, it is critical to know exactly when a vehicle should be considered purchased, leased or rented.

Finally, for both polluting and zero-emission cars, the limited deductible car expenses can only be reduced by the benefit in kind and by the user’s own contribution. A full deduction of costs in the situation where the car is used exclusively for private purposes can no longer be made under the new rules (Circular 30/2014 of July 15, 2014 will therefore no longer be applicable).

Investments in charging stations

In order to stimulate investments in charging stations, the related expenses will not be subject to a deduction limitation. For charging stations acquired, leased or rented as from 1 January 2030, the deduction will be limited to 75%. Moreover, Investments in public accessible charging stations (meeting certain technical requirements) made operational by companies between 1 September 2021 and 31 December 2022 will be incentivized by allowing an increased tax deduction of 200%. Similar investments made between 1 January 2023 and 31 August 2024 will benefit from a tax deduction of 150%.

For private individuals investments in charging stations (in or around the house) are incentivized through a one-time tax reduction in the personal income tax return, starting at 45% and gradually decreasing to 15% by 2024.

Increased Investment deduction for zero-emission lorries

Under certain conditions, mainly aiming at avoiding over-subsidizing, corporations can claim an increased investment deduction for the acquisition of new zero-emission lorries and some related investments. The increase can be used for investments made as from 2023 to 2026. The investment deduction rate starts at 21,5% and gradually declines over the years to 5%.

KEEP IN MIND THE DEADLINE !

VAT

• VAT return Q3 2021 / September 2021 : October 20, 2021

Corporate income tax

• Corporate income tax return - companies and non-resident companies with Belgian permanent establishment (balance date: 31/12/2020) : October 28, 2021
• Legal entities income tax return (“RPB”) (balance date : 31/12/2020) : October 28, 2021
• Local File Form 275LF (balance sheet date : 31/12/2020) : October 28, 2021

Personal income tax

• Personal income tax return - Belgian residents

         o Via proxyholder (Tax-on-web) : October 21, 2021

• Personal income tax return - non-residents

         o On paper : November 4, 2021
         o Via Tax-on-web : December 2, 2021