Common income tax provisions

• Fee form obligation for copyright income

• Relaxation of fee form reporting obligation

• Recharged costs

• Increased cost deduction for charging stations

Corporate tax provisions

• Foreign losses

• Taxable base of secret commission’s tax as minimum taxable base

• R&D tax credit and tonnage tax

• European Long Term Investment Funds (ELTIFs)

Individual tax provisions

• Replacement income of coworking spouse

• Exemption with progression regime

• Net income from immovable property

• Foreign pensions

• The tax reduction for charging stations

• Sports and culture vouchers and COVID-19

• Payroll wage tax exemption for additional training

• Seasonal workers

Fee form obligation for copyright income

Since many years debtors of income from copyrights and neighbouring rights are expected to report such payments on a form 281.45. The Law MTP introduces a legal basis for this longstanding practice and turns it into a legal obligation. In addition, the Law MTP makes the secret commissions tax regime applicable for such payments in case of non-compliance with the new reporting obligation.

Entry into force: applicable to income paid or attributed as from 1 January 2021 during a taxable period which is connected, at the earliest, with tax year 2022.

Relaxation of fee form reporting obligation

The annual preparation of fee forms (281.50) and summary statements gives rise to an important administrative burden. With a view to administrative simplification, the Law MTP abolishes the obligation to submit 281.50 fee forms when “an invoice or other replacing document” is issued by a taxpayer being an EEA tax resident.

In addition, the Law MTP delegates authority to the King to determine the threshold below which the fee form reporting obligation does not apply, but this threshold may in any case not exceed EUR 1,000 per year per provider of goods or services (not subject to indexation).

Entry into force: commission fees, etc. (qualifying costs) attributed as from 1 January 2021. 

Recharged costs

An administrative tolerance was applicable, further to which reception and restaurant costs were not disallowed in the hands of a taxpayer who recharged such costs to a 3rd party, provided a number of conditions were met.

The Law MTP not only enshrines this tolerance into the ITC, but also extends and relaxes it. As a result, all costs referred to in Art. 53, 7° to 9° ITC (not only reception and restaurant costs) are deductible if they are expressly and separately recharged (on the invoice) to any third party.

Entry into force: applicable as from tax year 2022.

Increased cost deduction for charging stations

The Law of 25 November 2021 on Tax and Social Greening of Mobility, provides for an increased cost deduction for charging stations for electric vehicles which are publicly accessible.

The Law MTP adds some conditions to benefit from this increased cost deduction: only “fixed” charging stations are eligible and the condition that the charging station be “intelligent” is further clarified. Other condition is that certain technical data (put forward by a Royal Decree) concerning the charge station will need to be reported to the Public Service Finance.

Entry into force: effective as from 1/9/2021.

Foreign losses

The Law MTP amends the (complex) Belgian tax regime applicable to foreign losses, and this mostly in response to comments made by the Council of State.

Regarding the imputation of Belgian losses or losses from non-treaty countries on profits for which the Belgian tax is reduced on the basis of a tax treaty, the Law MTP provides for the possibility for the taxpayer to oppose this imputation. The taxpayer’s choice - which can be made for each taxable period - is irrevocable and will result in the Belgian losses or losses from non-treaty countries being carried forward to a subsequent taxable period. .

As the application of the recapture rule(s) requires one to know when a loss was effectively offset, the Law MTP provides for an “identification obligation” for taxpayers who intend to offset losses that may fall within the scope of the recapture regime (identification in an annex to the tax return).

Some other technical changes are brought about by the Law MTP as well.

Taxable base of secret commissions tax as minimum taxable base

Art. 207, ind. 7 ITC listed a number of items on which the various tax deductions may not be applied. This is for instance the case for the part of the result that occurs from the taxable base of the secret commission’s tax on “non-reported costs and benefits in kind”. The Law MTP extends that specific deductibility limitation to the entire taxable base of the secret commission’s tax, including - for instance – “hidden gains” and the new income elements which the Law MTP subjects to a fee form obligation (see above). 

R&D tax credit and tonnage tax

The Law MTP amends the Program Law of 2 August 2002, to the effect that the R&D tax credit can no longer be applied during the periods in which the relevant profits are taxed under the tonnage tax regime.

Entry into force: applicable as from tax year 2022 connected to a taxable period starting on 1 January 2021 at the earliest.

European Long Term Investment Funds (ELTIFs)

The Law MTP introduces a tax regime for European Long Term Investment Funds (“ELTIFs”). Although ELTIFs are governed by Regulation (EU) 2015/760, which is directly applicable in the Belgian legal order, some national implementing measures are nevertheless required, e.g. in relation to the ELTIFs’ tax regime. Contrary to other Member States, Belgium had not yet provided for an appropriate tax regime.

An ELTIF is defined as “any [alternative investment fund] taking the form of a company incorporated under Belgian law with legal personality and which has been approved by the FSMA before commencing its activities in accordance with Regulation (EU) 2015/760 […]”. Contrary to, e.g., regulated real estate companies, ELTIFs must be recognised before commencing their activities.

The Law MTP includes several provisions which are essentially intended:

• to achieve neutrality from corporate income tax perspective;

• to prevent economic double taxation in the hands of corporate investors; and

• to provide for a WHT exemption for non-resident investors.

Generally speaking, the Law MTP ensures that ELTIFs are subject, mutatis mutandis, to the tax treatment applicable to the majority of Belgian investment companies.

Entry into force: absent any specific provision, 10 days after publication in the Belgian State Gazette.

Replacement income of coworking spouse

Any form of compensation intended to fully or partially offset a temporary loss of wages of coworking spouses represents taxable income. This is now explicitly embedded in the Income Tax Code (ITC) to remove any uncertainty.Applicable to income paid or attributed as from 1 January 2022.

Exemption with progression regime

The reserve of progression no longer applies to foreign income that, if it were not exempt, would have been taxed at a flat rate in Belgium.

Applicable as from tax year 2021

Net income from immovable property

The revaluation coefficient and associated indexation are enshrined in the ITC.Entry into force: 10 days after publication in Belgian State Gazette

Foreign pensions

Extra-legal pensions stemming from a (foreign) "pension system" will be subject to Belgian tax, regardless of whether or not the contributions have been paid to the definitive and exclusive benefit of the affiliate.Entry into force: applicable as from tax year 2022

The tax reduction for charging stations

The Law of 25 November 2021 on the Tax and Social Greening of Mobility (Dutch | French), provides for a tax reduction for charging stations for electric vehicles. The Law MTP adds some conditions to benefit from this tax reduction: only “fixed” charging stations are eligible and the condition that the charging station be “intelligent” is further clarified.

Entry into force: effective as from 1/9/2021

Sports and culture vouchers and COVID- 19

Due to the COVID-19 pandemic, the validity period of sports and culture vouchers that were initially valid until 30 September 2020 was already extended by one year (i.e. until 30 September 2021). The Law MTP now extends that validity period anew, i.e. until 30 September 2022.

Entry into force: effective as from 30 September 2021

Payroll wage tax exemption for additional training

Since 1 January 2021, employers who allow their employees to follow 'extra' training (that is, more than the legal minimum) are entitled to a partial exemption from payment of wage tax. A number of adjustments are now being made to this scheme.

Entry into force: applicable to remuneration paid or attributed as from 1 January 2022

Seasonal workers

Since 25 March 2021, 18.725 % wage tax must be withheld from the salaries of non-residents/seasonal workers in the agriculture and horticulture sector. The Law makes this wage tax 'liberating', meaning that the workers concerned are exempt from having to submit a tax return for non-residents. The ‘liberating’ character of the wage tax is subject to a number of conditions.