Finance Minister Vincent Van Peteghem's tax reform: how could it impact your business?
Finance Minister Vincent Van Peteghem's tax reform: how could it impact your business?
April 2023 – In early March 2023, Finance Minister Vincent Van Peteghem presented his long-awaited tax reform note. Specifically, it involves 25 measures - spread over 600 pages of legal texts - that are intended to shift €6 billion in taxes. Which measures could impact your business?
This paper is a follow-up to the vision paper the minister put on the table in July 2022. The major thrusts are a reduction in the burden on labour, higher wealth taxes, safeguarding the competitiveness of companies and a greener, healthier and simpler tax system.
We list the most important topics for you.
Modern and simple taxation
Employees should be able to become shareholders of their employer. Therefore, the system of option plans will be reformed and simplified, with only shares of the employer or of an affiliated company being eligible. In addition, a new tax scheme is being developed to allow employees to participate in their employer's equity in a financially beneficial way. This will also allow start-ups and scale-ups to make use of an important tool to attract and keep talent on board.
The second pension pillar (the supplementary pension) will be made simpler and more transparent so that more employees can benefit from this scheme. At the same time, the existing 80% limit will be lifted, without touching the accrual possibilities that exist today. There will be a system based entirely on gross annual earnings for the year.
Government efforts for a more automated tax system will be stepped up. The invoice flow will be further digitised to reduce the administrative burden and VAT gap for companies.
The tax and NSSO treatment of benefits of all kinds will be unified. A number of benefits that are valued at a flat rate today will be taxed based on their actual value. These include the free provision to company executives of housing, heating, electricity and domestic staff.
The tax system of benefits in kind linked to company cars will remain unchanged. In this way, the further greening of company cars in our country can be rolled out in a legally certain manner.
Fair contribution on assets
As different investment options should be treated in a tax-neutral manner, the FDI deduction is being reformed. This is a scheme to prevent double taxation of profits within the own group structure). The existing deduction will be replaced by an exemption.
Within an international framework, a minimum tax for multinationals will be introduced. This should lead to less tax avoidance and a level playing field for Belgian companies.
Competitiveness and legal certainty
The annual tax on securities accounts will be doubled.
The investment deduction system will be reformed, retaining the basic investment deduction and the R&D (research & development) investment deduction and creating a substantially increased investment deduction for sustainable investments.
As an additional incentive for sustainable investments, a system of accelerated (double) depreciation will be created on top of the investment deduction.
The R&D tax credit will be retained and extended to sustainable investments. This will allow companies to reap faster tax benefits from large investments they make.
The innovation deduction will be reformed, with a clearer definition of intellectual property for the deduction of innovation income. This will be subject to a patent requirement. This measure ensures that the deduction is only used by companies that effectively innovate.
This tax reform proposal, which serves as a starting point for government negotiations, should take effect from 1 January 2024. Waiting to see which measures will be definitively retained and which will fall...
Source: 'First phase of broader tax reform' note, Finance Minister Vincent Van Peteghem, March 2023