The Belgian Government Michel I has reached an agreement on July 23 on the new budget measures and on the so-called “tax shift”. The purpose of the tax shift was to reduce income taxes on professional income, to restore the competitive position of Belgian industries and businesses, and to create jobs.
A first review of the various measures and the tax shift, indicates however that the final result of the tax shift measures is quite limited and to a certain extent even uncertain since the Government has not yet produced clear data on the precise effects of the tax shift. At the same time however, the Government has been more detailed on various new tax increases…..
The following measures relate to the tax shift:
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For a large category of employees the employer’s part of the social security contributions will be reduced from 33% to 25%.
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The income tax rates will be modified in order to allow a large group of taxpayers to benefit in 2016 from an increase in their net monthly income up to a 100 euro.
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Various charges and contributions applying on night work and shift work will be reduced.
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Various new tax measures will stimulate technical innovation and research & development.
The following tax increases will be introduced:
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VAT on electricity will be increased from 6% to 21%.
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Excise duties on gasoline, tobacco products and alcohol will be increased.
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A so-called “health tax” on sugary products and certain types of “unhealthy” food will be introduced.
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The withholding tax on moveable income will be increased from 25% to 27%, except for interest on saving accounts.
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Capital gains on stock exchange shares realized within a period of six months after the date of acquisition, will become subject to a so-called “speculation tax”. The tax regime on non-stock exchange listed shares will not be changed or modified.
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The Cayman tax (which is to be introduced in the very near future and which taxes certain types of offshore income) will be modified in order to increase its expected tax revenues.
The above measures will have to be further elaborated and formalized as new tax legislation during the coming weeks and months. We will be pleased to answer any general questions or comments you may in the meantime have with respect to these new measures.