The Union des Classes Moyennes (UCM), which represents independent businesses and SMEs, is in favour of a phased removal of notional interest on shares. This is contrary to the view of the Federation of Belgian Companies (FBC).
The phased removal is the plan under consideration by the government for financing the Corporate Tax decrease currently being considered by the government. This is reported in L’Echo today (Tuesday).
The two associations are adopting fiscally divergent positions on the how to achieve the same objective; a decrease in the rate of Corporate Tax (known in Belgium as “Isoc”).
“The UCM supports phased removal of notional interest at a rate of the decrease of the nominal rate of Corporate Tax,” the union details in a ‘memo of its official position.’ It says that the deduction is not in the interests of SMEs, giving an example, “in 2012, only 23.68% of total tax deductions were of benefit to businesses with less than 50 workers.”
The UCM suggests the gradual removal of these deductions in line with the nominal Corporate Tax rate decrease. The association is also recommending a rate decrease to 25% with a reduced rate for SMEs to 20%.