Budget 2012

Individual tax measures

Last update: 29 January 2013 - 10:35 CET

Corporate tax measures | Indirect tax measures | Other tax measures

Overview of individual tax measures in the budget 2012 agreement

Company cars 

Bedrijfswagens | Voitures de société

Law of 28 December 2011

The Law of 28 December 2011 containing miscellaneous measures (Dutch | French) determines the taxable benefit in kind at 6/7ths of the car’s list price, multiplied by the CO2 emission coefficient.

The list price is defined as the price invoiced including VAT and options but excluding discounts. This definition of the notion of list price applies both to new and second-hand cars, according to the comments to the Law of 28 December 2011 (Dutch | French). For second-hand cars, it is the "second-hand" invoice that should be taken into account (see however the changes introduced by the Program Law of 29 March 2012 below).

The so-called reference CO2 coefficient is equal to 5.5% for diesel engine producing 95g/km or for petrol, lpg and gas engine producing 115g/km. Higher CO2 emission will increase the percentage by 0.1% for each gram of CO2 above the standard emission-level (with a maximum of 18%). Lower CO2 emission will decrease the percentage by 0.1% for each gram of CO2 below the standard emission-level (with a minimum of 4%). The benefit in kind can never be below €820/year. The latter minimum is indexed and amounts to €1,200 for tax year 2013.

The Law of 28 December 2011 (Dutch | French) confirms that the benefit in kind so determined can be reduced with the amount of the personal contribution paid by the beneficiary.

Finally, the possibility for taxpayers to deduct €0.15 per kilometer for home/office travel is restricted. Under the new rules, this deduction can never exceed the amount of the taxable benefit in kind. 

These new measures apply to benefits in kind granted since 1 January 2012.

Source:  Law of 28 December 2011 containing miscellaneous measures, Articles 39-40 (Dutch | French)

Program Law 

The Program Law of 29 March 2012 (Dutch| French) has modified the initial regime on 2 aspects. 

First, in order to avoid abuses and discrimination, the definition of list value has been modified. Going forward, the list value should be understood as the list price applicable in the sale of a factory-new car to an individual buyer, including options and the actually paid VAT, and excluding discounts.

Second, both for new and second-hand cars the benefit in kind takes into account the age of the car, by multiplying the list price with a percentage in function of the period elapsed since the first registration of the car (whether in Belgium or abroad): 

• 0-12 months: 100% 
• 13-24 months: 94% 
• 25-36 months: 88% 
• 37-48 months: 82%
• 49-60 months: 76% 
• 61 months or more: 70%. 

This age factor also applies as of tax year 2013, except for payroll tax purposes where this factor can only be taken into account as of 1 May 2012.

On 1October 2012, the tax authorities have published a second update of the Frequently Asked Questions on the website of the FOD/SPF Finance (Dutch | French), which provides guidance  on the interpretation of the new company car rules.

Source: Program Law of 29 March 2012, Article 143 (Dutch | French) and Program Law of 22 June 2012, Article 85 (Dutch | French).

Free housing for company executives 

Gratis terbeschikkingstelling van een privéwoning | Logement gratuit

The budget 2012 agreement provides for an increased taxable basis of the benefit in kind resulting from the free disposal of housing for company executives.

The Royal Decree which implements this measure was published in the Belgian Official Gazette of 28 February 2012 (Dutch | French) and is applicable to benefits in kind granted as of 1 January 2012.

Further to this Royal Decree, the benefit in kind relating to (non-furnished) property with a notional rental (cadastral) value exceeding €745 needs to be calculated as follows: 100/60ths of the (indexed) notional rental value of the real estate multiplied by 3.8 (previously by 2).

Example:

A management company owns a house with a notional rental value (indexed) of €4,000 and puts it at the disposal of its managing director free of charge. In this situation, the benefit in kind amounts to €25,333 under the new regime (€13,333 under the old regime).

In addition, the Royal Decree ties the benefit in kind resulting from the supply for free of heating and electricity to the index (Article 178 ITC). For income year 2012, the benefit in kind amounts to:

a) When granted to company executives:

• Heating €1820 (previously  €1640)
• Electricity €910 (previously  €820)

b) When granted to other beneficiaries:

• Heating: €820
• Electricity: €410

Source: Royal Decree of 23 February 2012, Article 2 (Dutch | French)

Tax regime of stock options 

Belastingregime van aandelenopties | Régime fiscal des options sur actions

The Law of 26 March 1999 provides that stock options are taxable at the moment of grant if the options are accepted in writing within 60 calendar days following the offer, regardless of whether the exercise of the option is unconditional or not. Later benefits at the sale of the option, the exercise of the option or the sale of shares realised outside a professional activity are not taxable any more as professional income.

With respect to non-quoted stock options, the taxable benefit in kind (at grant) is determined on a lump sum basis, which was 15 % of the value of the underlying shares at the time of offer, prior to 2012. In case the option is exercisable during more than 5 years, the amount of the taxable benefit is increased by 1 % of the value of the underlying shares per additional year (or part of a year). A reduced percentage (7.5 % prior to 2012) + 0.5 % per additional year exceeding the 5 years, applies if a number of conditions are met.

The Law of 28 December 2011 (Dutch | French) provides for an increase of the percentages which need to be used to determine the taxable benefit in kind for non-quoted stock options: the default rate is increased from 15% to 18%, whereas the reduced percentage of 7.5% is increased to 9%.

The increased rates apply to options offered as of 1 January 2012.

Source: Law of 28 December 2011 containing miscellaneous measures, Article 72 (Dutch | French)

Tax regime of investment income 

Belastingregime van roerende inkomsten | Régime fiscal des revenus mobiliers

Withholding tax rates

The Law of 28 December 2011 (Dutch | French) provides an increase of the reduced withholding tax rate of 15% on dividends to 21%. The 15% rate applied to (i) dividends related to shares that have been publicly issued from 1994; (ii) dividends related to shares issued in exchange of private (non-public) cash contributions made from 1994; and (iii) dividends related to shares in recognised investment companies. 

The default withholding tax rate for dividends is maintained at 25%. Liquidation boni remain subject to the 10% withholding tax rate. Share buybacks also become subject to withholding tax at the rate of 21%. 

The default withholding tax rate on interest is increased from 15% to 21%. 

For interest from government bonds, the withholding tax rate is maintained at 15% for bonds issued and subscribed during the period from 24 November to 2 December 2011. 

Savings from regulated saving deposits continue to be subject to a 15% withholding tax rate for the portion in excess of the tax-exempt bracket. The exemption for interest up to €1,830 (per taxpayer - amount for tax year 2013) remains available at source (no deferral until issuance of the tax assessment notice).

Royalties remain subject to the 15% withholding tax rate.

We refer to the Budget 2013 website for the changes to the withholding tax rates as of 1 January 2013.

Source: Law of 28 December 2011 containing miscellaneous measures, Articles 27,29,33-34 (Dutch | French)

4% surcharge

Law of 28 December 2012
The Law of 28 December 2011 (Dutch | French) introduces a separate 4% surcharge applicable to taxpayers with a movable income (interest and dividends as defined by Article 17, §1, 1° and 2° ITC) exceeding net €13,675 per year. Net amount means the amount collected or received, before deduction of any collection and other similar expenses, and increased with the withholding tax and domicile state levy (if any). The amount of €13,675 is indexed and amounts to €20,020 for tax year 2013.

Movable income qualifying for the determination of the threshold does not include tax-exempt interest from regulated savings deposits and other interest and dividends which are not taxable according to Article 21 ITC (such as buyback or liquidation dividends from certain investment companies), interest on government bonds issued and subscribed in the period 24 November - 2 December 2011 and liquidation dividends. Similarly, the 4% surcharge is not due on tax exempt interest from regulated saving deposits and other interest and dividends which are not taxable according to Article 21 ITC, on said government bonds and on liquidation boni. The 4% surcharge is also not due on interest and dividends subject to withholding tax at the rate of 25%. For purposes of calculating the €20,020 threshold, interest and dividends taxed at 25%, as well as taxed interest on savings deposits, are taken into account first.

Two collection systems are put in place: 

• In the situation where the taxpayer allows the debtor of the withholding tax (for registered securities) or the paying agency (e.g. the bank) as meant by Article 2, §1, 2° of the Royal Decree of 27 September 2009 (for bearer and dematerialised securities) to inform the authorities of the amount of movable income perceived, the 4% surcharge is not withheld at source but is due further to the establishment of the personal tax liability based on the personal income tax return;
• In the situation where the taxpayer does not allow the debtor of the withholding tax to inform the authorities of the amount of the movable income perceived, the 4% surcharge will need to be withheld at source and any excessive withholding at source (e.g. because the threshold of €20,020 is not reached) can be claimed back via the income tax return. Any excess surcharge withheld at source is first credited against any personal income tax due based upon the tax return, any excess remaining being reimbursed. The taxpayer can also opt to suffer the 4% surcharge (even if not due) in exchange for not disclosing his movable income).

The Law of 28 December 2011 (Dutch | French) further confirms that no communal surcharge can be levied on top of the 4% surcharge.

The authorities responsible for collection of the information regarding a taxpayer’s movable income are a “central contact point” within the Federal Finance Department. This “central contact point” will automatically transmit all information to the tax inspection offices if the taxpayer’s movable income exceeds €20,020 per year. If not, they will only do so upon request of the tax offices and insofar this is necessary for levying the surcharge. Note that information regarding interest and dividends taxed at 25% would be automatically transmitted to the “central point” (no choice). On the other hand, there is no obligation to inform the “central contact point” with information relating to interest and dividends which are exempt under Article 21 ITC.

In this context it must be mentioned that the modification by the Law of 28 December 2011 of Art. 313 ITC (containing the obligation to report movable income in the personal tax return) triggers an undesired result with respect to movable income that is exempt from withholding tax but not from personal income tax. It relates to movable income not exempted by Article 21 ITC, such as dividends from housing real estate investment companies and (private) privaks / pricaf. This income would no longer be exempt. 

The FPS Finance had announced on 23 February 2012 that the 4% surcharge could not yet be collected, in the absence of practical modalities. These modalities have eventually been published on 5 April 2012 on the on-line Presscenter of the Federal Government (Dutch | French).

The 4% surcharge must be reported through a new tax form 273C which is available on Finform (Dutch | French) and on the portal site of the FPS Finance (Dutch | French).

Currently only paper filing is possible; e-filing will be available "soon" via RV-on-web/PRM-on-web. Payment must be made, within 15 days of the attribution or payment of the dividend or interest, on the bank account BE79 6792 0022 1033, PCHQ BE BB.

The circular of 2 July 2012 (Dutch | French) confirms that the taxpayer can opt, per product, to have the surcharge withheld at source or not.

Source: Law of 28 December 2011 containing miscellaneous measures, Articles 25-26,28, 30-33,35, 37 (Dutch | French), Program Law of 29 March 2012, Article 145 (Dutch | French) and Program Law of 22 June 2012, Article 86 (Dutch | French)

Program Law of 29 March 2012

The Program Law of 29 March 2012 contains a few number of clarifications on the 4% surcharge.

In the case where it is not the issuer but a paying agent (e.g. a bank) who pays the movable income, it is the paying agent who will have to either levy the 4% surcharge or comply with the notification requirements.

Source: Program Law of 29 March 2012, Article 145 (Dutch | French)

Program Law of 22 June 2012

The Program Law of 22 June 2012 introduces some technical corrections to the 4% surcharge which relate mainly to the reporting and payment obligations of the debtors of the interest and dividend income.

For interest or dividends paid or attributed between 1 January and 1 August 2012 no penalties nor late payment interest will be due for late filing or late payment. Tax filings and payments in relation to movable income paid or attributed within this timeframe will be considered as legally valid.

Source: Program Law of 22 June 2012, Articles 86-88 (Dutch | French)

Law of 13 December 2012

The Law of 13 December 2012 containing fiscal and financial measures modifies Articles 53, 2° and 198, §11° ITC to clarify that the 4% surcharge borne by the debtor of the income is not deductible, just like the withholding tax borne by the debtor.

Source: Law of 13 December 2012 containing fiscal and financial measures, Articles 2, 45, 1° (Dutch | French)

We refer to the Budget 2013 website for the changes (i.e. abolishment and impact thereof for movable income collected in the course of 2012) to the 4% surcharge as of 1 January 2013.

Taxation of extra-legal pensions 

Belasting van extralegale pensioenen | Régime fiscal des pensions extra-légales

Program Law 22 June 2012

The separate tax rate of 16.5% which applies to lump sum pension distributions (for the part built up with employer contributions) will be pushed forward with 2 years as from 1 July 2013. The 16.5% flat tax rate will only be available for payouts as of the age of 62, with rates of 20% and 18% being applicable for distributions at the age of respectively 60 and 61. An anticipative (but non-liberating) levy of 6.5% is due on the reserves built-up with premiums paid before 1 January 1993 in relation to life insurance and pension savings contracts which benefited from a tax reduction for long-term savings (3rd pension pillar). These distributions are currently taxed at 10%, except if they originate from premiums paid prior to 1 January 1993 in which case they are subject to tax at the rate of 16.5%. The Program Law of 22 June 2012 contains measures to reduce the latter rate to 10% and to collect immediately (instead of upon the age of 60) the difference of 6.5% as an advance from the insurance companies or pension institutions. The anticipative levy on the life insurance contracts was due on 1 October 2012, whereas the anticipative levy on the pension savings contracts will be payable on 1 November 2012.

As of 1 January 2012, individual pension accruals will need to be externalised (the 4.4% premium tax will be levied on the contributions, except for the individual internal pension accruals that have built up by the end of the last accounting year ending before 1 January 2012 that would be voluntarily outsourced). A similar measure would be introduced in relation to the externalisation of so-called “keyman” insurance contracts through which individual pension promises are funded, albeit with a different entry into force and whereby different rules will apply in case of voluntary outsourcing. Measures are introduced in case of voluntary outsourcing to avoid taxation at the level of the individual. For more info about this measure, please refer to the Corporate Tax Measures page.

The 30 to 40% tax reductions for accumulated personal pension (individually or via a group insurance) would be limited to 30% as of tax year 2013. Under the current legislation, tax reduction (up to 40%) depends on the level of the individual’s taxable income. This measure will soon be deposited in Parliament.

Source: Program Law of 22 June 2012, Article 63 (Dutch | French); Royal Decree of 27 September 2012 regarding the anticipative levy in relation to pension savings (Dutch | French); Royal Decree of 27 September 2012 regarding the anticipative levy in relation to long-term savings (Dutch | French)

Other individual tax measures 

Andere maatregelen inzake personenbelasting | Autres mesures d’impôt des personnes physiques

Energy saving tax measures

The Law of 28 December 2011 containing miscellaneous measures (Dutch | French) changes some tax measures regarding energy saving expenditures.

Energy saving expenditures (eg. for isolation, for placing double glass or solar panels) used to give rise to a tax reduction of 40% on the expenses made (within certain limits). The Law of 28 December 2011 (Dutch | French) abolishes this tax reduction for contracts concluded as of 28 November 2011, except for investments in roof isolation. This abolishment does not apply to contracts (other than relating to roof insulation) concluded prior to 28 November 2011 provided the investment is made in 2012. For roof isolation, the tax reduction is maintained but reduced to 30% for investments pursuant to contracts concluded after 27 November 2011. The carry-forward of excess tax reduction, as well as the conversion into a tax credit, is abolished for investments pursuant to contracts signed after 27 November 2011. However, the carry-forward is maintained for investments (other than roof isolation) pursuant to a contract signed prior to 28 November 2011, provided the investment is made in 2012. Also, existing carry-forwards (relating to prior tax years) are not affected.

The incentives for low or zero energy houses or passive houses are abolished as of tax year 2013. The tax reduction will, by way of derogation, still be granted if the certificate for the house was issued by the competent authority no later than on 31 December 2011. Given the administrative backlog, certificates issued in the period 1 January – 29 February 2012 are assimilated to timely delivered certificates if the request for certificate was filed no later than on 31 December 2011. The tax reduction remains available for houses certified in 2011 or earlier.

Finally, the green loan incentive is reduced to 30% for investments made as of 1 January 2012.

Source: Law of 28 December 2011 containing miscellaneous measures, Articles 41-42 (Dutch | French)

Green car premiums

The Law of 28 December 2011 (Dutch | French) confirms the abolishment of so-called green car premiums or discounts, introduced by the Law of 27 April 2007 (MMA fund), with effect as of 1 January 2012.

By way of transitional measure cars supplied in 2012 are still eligible for the premium if 3 conditions are simultaneously satisfied:

1. the car has been ordered prior to 28 November 2011;
2. an advance invoice has been issued at the latest on 31 December 2011 for an amount equal to twice the premium (for cars with a CO2 emission between 105 and 115 g/km giving rise to a 3% discount) or once the discount (for cars with a CO2 emission lower than 105 g/km giving rise to a 15% discount);
3. the purchase order and the advance invoice have been submitted to the competent service within the FGS Finance by the supplier (the car dealer) no later than on 5 January 2012.

Source: Law of 28 December 2011 containing miscellaneous measures, Article 70 (Dutch | French) 

Tax reduction for service vouchers

Budget 2012

The tax reduction related to the use of service vouchers (30% of the total expenses, capped to €2,560 service vouchers expenses) is maintained. On the other hand, the price of such vouchers would be increased from €7.5 to €8.5 in 2013. The price per voucher would be indexed going forward. Further to the Royal Decree of 28 December 2011 modifying the Royal Decree of 12 December 2001 (Dutch | French), the number of vouchers is, as of 1 January 2012, limited to 1,000 vouchers per year. Service vouchers for cleaning services would be restricted to residential properties belonging to individuals.

Source: Royal Decree of 28 December 2011, Article 1 (Dutch | French)

Budget control 2012

As of 1 January 2013, the price per service voucher has been increased to €8.5. The maximum number of vouchers per year is limited to 400 per person and 800 per family. It is still possible to purchase additional vouchers in excess of these maxima (100 additional vouchers for an individual person, 200 for a family), but at a price of €9.5 instead of €8.5. Hence, the absolute maximum number of vouchers is now 500 per person and 1,000 per family.

Source: Royal Decree of 20 December 2012, Article 3 (Dutch | French).

Increase of tax-exempt bracket

The tax-exempt bracket for income lower than €24,410 would be increased with €200 as of income year 2013 (tax year 2014). This means an impact corresponding of approximately a net salary increase of €50 for income year 2013. 

Other reductions

As provided in the draft law containing tax and financial measures, the currently available tax deductions will be replaced by a 30% tax reduction, safe for expenses related to gifts, daycare for children and principal residence which would benefit from a higher tax reduction of 45%. These new rules will apply as of tax year 2013.

Contacts

Patrick Derthoo
Partner 
pderthoo@deloitte.com

Related info

TASC - Car Company car tax calculator

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