The Belgian VAT authorities have issued an overview of their interpretations/comments on certain topics regarding "VAT grouping" in Belgium. Overall, there are not many changes on the vehicle of the VAT Group in Belgium nor major impacts. Below, you can find the most interesting comments:
1) Voluntary deregistration of the VAT Group
Upon creation of the VAT Group, the members should stay in the VAT Group for at least until December 31 of the third year following the creation of the VAT Group. This implies that the members cannot voluntarily leave the VAT Group, unless all conditions to stay in the VAT Group are no longer met. However, the VAT authorities confirmed that this does not mean that the "VAT Group"- as a whole - cannot deregister before that moment in time. A VAT group can therefore voluntarily deregister, even when the aforementioned period has not passed.
2) Future economic link
The main conditions to form a VAT group between more VAT taxable entities are that all parties should be linked on a financial, economic and organizational point of view, at the moment of creation. However, the VAT Authorities accept that the proof of economical link can also be made on future agreements (such as rental agreement) as long as it is confirmed in writing at the moment of creation of the VAT Group and as long as the creation of the VAT Group will take place in the same calendar year as the fulfillment of the economical link.
3) VAT revision compensation method
Once more, it is confirmed that is compulsory that the revised VAT amounts on capital goods at the moment of creation of deregistration of a VAT Group must be reported in the VAT return. Both VAT amounts can be compensated in the same VAT return of the Group (the first VAT return). Even though the result of the compensation is 0,00 EUR, it remains an obligation to report the revision, otherwise a penalty up to 20% can be levied.
In the event that the revision of the VAT amounts has no impact on the VAT return itself (box 71/72), there remains the possibility to ask for a waiver of the penalty (upon explicit request and if all other conditions are fulfilled).
A new outline agreement between Belgium and Luxemburg: a doubling of the 24 days to 48 days
It is commonly known that Belgian tax residents working in Luxemburg can realize – if certain conditions are met - a considerable tax advantage.
According to the double tax treaty between Belgium and Luxemburg, Belgian tax residents performing their activities in Luxemburg for a Luxemburg employer, should be taxed in Luxemburg with respect to their income regarding the working days spent in Luxemburg (i.e. the work state). The income related to working time outside Luxemburg (i.e. in Belgium or travel in another country) should, in principle, be taxed in the residence state (i.e. Belgium).
Consequently, the Belgian tax authorities examined in the past extensively a large number of Belgian employees, who asked a tax exemption on their Luxemburg income in their Belgian personal income tax return, and they were asked to prove their physical presence in Luxemburg.
In 2015 a mutual agreement was signed between Belgium and Luxemburg which foresees an exception on the above mentioned rules. Based on that agreement, Belgian residents were allowed to perform activities outside Luxemburg for a maximum of 24 days per calendar year, without being taxed in Belgium. Thus, they are deemed to have performed their duties physically in Luxemburg (administrative tolerance).
It is highly expected that the limit of 24 days will be doubled 48 days in order to support the work-life balance for Belgian residents under employment agreement in Luxemburg. Nevertheless, it should be carefully monitored whether or not the employee will perform 48 days in Belgium, since this could influence the social security position and possible trigger social security contributions in Belgium.
We will keep you posted, as soon as the agreement is officially signed between both countries.
Launch of "eStox", a platform for electronic registers of shares
Today, information on the shareholders of a company should be found in physical registers which must be kept at the company’s registered seat. As a result, the information on the shareholding of a company is often lost, wrongfully entered or not kept up to date, which can lead to disputes.
In order to address these concerns, the new Belgian Companies’ Code ( effective 1/5/2019 for new companies and 1/1/2020 for existing companies) foresees that the register of shares can be kept in an electronic form.
The Belgian Federation for Notaries Public and the Belgian Institute for Tax Advisors and Accountants (ITAA) have launched a platform for electronic registers of shares, named "eStox". Through this platform the registers of shares of a Belgian company can be kept electronically and companies can register any change in ownership.
For the moment, eStox is only accessible for notaries, accountants and tax advisors, however, in the future the shareholders and directors of a company will also have access to the platform.
Finally, the electronic register of shares can have an important role in the registration of the Ultimate Beneficial Owner (UBO) information (see below), since companies will have the option to automatically link their electronic register of shares with the UBO register.
Mazars can assist you with the creation of an electronic register of shares on eStox, please contact us for further information in this respect.
UBO-register: deadline September 30, 2019!
The deadline for the registration of the Ultimate Beneficial Owners (UBO) of Belgian companies or association is approaching. We would like to remind you that all Belgian companies, foundations and trusts or similar legal entities have to register information about their UBO into the UBO-register by September 30, 2019 at the latest!
For more information in this respect, we refer to our previous newsletters.
Mazars can assist you with the registration in the UBO-register, please contact us as soon as possible if you require our assistance in this respect.
KEEP IN MIND!
- VAT return August 2019: before September 20, 2019
- Reclaim foreign VAT: September 30, 2019
CORPORATE INCOME TAX RETURN
- Corporate income tax return – companies (Balance date: 31/12/2018): September 26, 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.
- Transfer pricing local form ‘275LF’: September 26, 2019
- Prepayment corporate income tax (Q3 2019): October 10, 2019
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