After one year of discussions, pressure and tension, the Federal Government has finally reached agreement on corporate tax reform that sets different rates for small and medium-sized enterprises (SME) and other companies. The nominal corporate-tax rate is 33%, although in actual fact it is lower, as a result of the large number of possibilities for deductions that the Belgian tax system offers. The rate will be reduced to 29% in 2019 and 25% in 2020 for larger companies, while the SMEs will pay 20% on a taxable portion of 100,000, from next year.
The reform will be neutral from a budgetary point of view, Finance Minister Johan Van Overtveldt said, stressing the historic nature of the measure. The deduction system will be simplified. Notional interest deductions, which were to have been scrapped in a first draft of the project, have been maintained, but have been adapted so as to weigh less on the State budget.
A value-added tax had been mulled within the reform but was vetoed by the New Flemish Alliance (N-VA) and Open Vld parties. A compromise was worked out in the form of a tax on subscriptions to securities accounts. A 0.15%-tax will be applied when such accounts are valued more than 500,000 euros.
t
The Brussels Times
