Reform of patrimony tax for not-for-profit associations, NPOs and private foundations from 2024
February 2024 - Until the tax year 2023, non-profit organisations, international not-for-profit organisations (NPOs) and private foundations were subject to a 0.17% tax on the value of their assets (albeit with an exemption of a first tranche of EUR 25,000 of assets).
Since 1 January 2024, a reformed rate system has been in place, with which the legislator aims to bring these rates in line with the evolution of inheritance tax.
New progressive rates and higher exemption
From 2024, you should consider the following rates:
· - 50,000.00 EUR: 0% (foot exemption for all taxpayers)
· 50,000.01 - 250,000.00 EUR: 0.15%
· 250,000.01 - 500,000 EUR: 0.30%
· 500.000,01 - ?: 0,45%
Foreign assets also in the crosshairs
Until now, the patrimony tax did not apply to real estate located abroad. Based on Constitutional Court case law, this will come to an end. At the same time, a regulation was developed to avoid double taxation. In concrete terms: if a property abroad is subject to a similar (patrimony) tax, the Belgian patrimony tax - provided a number of formalities are complied with - is reduced by the foreign tax (converted into euro on the payment date).
Tax reductions for specific sectors
Under the reformed patrimony tax, the legislator is exempting the following sectors:
· The healthcare sector (hospitals, psychiatric institutions, clinics and dispensaries), supplemented by a number of public-law or government-recognised institutions active in the field of social work, social security and protection of children and the elderly, which carry out operations exempt from VAT for more than half of their turnover on the basis of Article 44, §2, 1° and 2° of the VAT Code
· Maatwerkbedrijven die opgericht of erkend zijn door de bevoegde gewestelijke regering of instelling, zonder voorwaarde op vlak van omzet
· Medical homes, as referred to in Article 32, §1, second paragraph of the Royal Decree of 3 July 1996 on compulsory insurance for medical care and benefits, without any turnover condition
· Not-for-profit associations in which healthcare institutions often house their infrastructure
For these sectors, the value of their assets is reduced by 62.3%, so that only 37.7% of the value of their assets is taxed. As a result, these institutions never pay more than (rounded) 0.17% on their assets.
