Belgium and New Tax Measures for Individuals
Belgium and New Tax Measures for Individuals
As happens every year, the Belgian Parliament and government adopted in the last weeks of 2009 various measures affecting individual taxation, most of them applying to income paid or attributed as from 1 January 2010. Besides the measures which were already mentioned in our previous reports1 the following provisions are also relevant for individual taxation.
Benefits-in-Kind: Changes in Lump-Sum Valuation for Supply of Electricity and/or Heating
With regard to the free supply of electricity and/or heating, the beneficiary is taxed on a lump-sum amount. The annual lump-sum amounts are increased in two stages2:
Senior executives and directors:
Until 31/12/2009 From 01/01/2010 From 01/01/2011
Heating €1,180 €1,480 €1,640
Electricity €590 €740 €820
Other beneficiaries:
Until 31/12/2009 From 01/01/2010 From 01/01/2011
Heating €590 €740 €820
Electricity €295 €370 €410
These amounts are not subject to annual indexation.
Lump-Sum Business Expenses for Company Directors
The Program Law of 23 December 20093 includes a provision that reduces company directors’ lump-sum business expenses from 5 percent to 3 percent with effect from assessment year 2011 (income year 2010). The maximum deductible amount is also reduced to €1,550.50 (indexed amount for assessment year 2011 – income year 2010, is €2,150.00).
Social Benefits: Tax Regime for Meal Vouchers Incorporated into the Code
The Law of 22 December 2009 containing tax and various provisions4 has introduced a legal basis into the Belgian Income Tax Code for the tax treatment of meal vouchers, sport/culture vouchers, and eco-vouchers issued to employees and directors. Subject to compliance with various conditions specific to each category of voucher, the vouchers are regarded as tax-exempt benefits for their beneficiaries and as non-deductible expenses for the employer or company issuing them. With regard to meal vouchers, however, it should be noted that the issuing employer or company is authorized (as from 1 February 2009) to deduct an amount of €1 per voucher.
These new provisions apply to benefits received as from 1 January 2009, whereas the non-deductibility measure will enter into force as from assessment year 2010. With regard to sports/culture vouchers, a circular letter of 2 June 2009, issued by the Belgian tax authorities, indicates that the tax administration will apply the regime retroactively as from 1 July 2006.
Automatic Exchange of Information for Interest Payments to Residents of Other EU Member States
As from 1 January 2010, Belgium has introduced the automatic exchange of information on interest payments made in Belgium to individuals residing in other European Union (EU) member states or in associated and dependent territories. As from that date, the withholding tax and the revenue sharing provided for during the transitional period by the EU Directive on taxation of savings income in the form of interest payments is abandoned.5
Gifts to Charitable Institutions in EEA Members States
The deductibility of gifts made to charitable institutions has been further extended to institutions established in a member state of the European Economic Area.6 This extension is applicable to gifts made as from 1 January 2009.
Source: KPMG