Tuesday, 16 February 2016
There is no plan to review the deduction of the notional interests, indicated on Tuesday the Minister of Budget Sophie Wilmès, who admits nevertheless that they need to “review the situation”. The notional interest is a unique tax measure that allows for the deduction of risk capital. A day earlier her colleague in charge of finance, Johan Van Overtveldt, hinted of an end of this notional system. He was speaking in a Belgian-American context with a viewsight towards Washington.
“We do not plan to abandon the notional interest, on the contrary if all these mechanisms that makes our country interesting for foreign investors would disappear, we would need to review the situation”, suggested the liberal minister on Tuesday morning speaking on Bel RTL.
The Budget minister said that one would need to adapt to the evolution. “I don’t have any problem with that, the problem is to estimate how to adapt, how much it costs and when”, she argued.
Asked about the question raised by Mr Van Overtveldt to reduce the corporate tax rate to 20%, the minister said that each party had the right to come with suggestions to the legislating body, “but it would require the agreement of four parties and we would especially have estimate the costs to the Belgian state”.
Currently Belgium has one of the highest corporate tax rates in Europe (34%) which by many entrepreneurs and economists is questioned argueing whether it is in the country’s best interest and if it hinders in stimulating its economy.
She confirmed that such a change would be a good idea “especially if, and only if, it benefits our small and medium sized enterprises”, however reminding that it could pose a problem for foreign investors who have based their investments on the facial tax rate.