Following a proposal by the Minister of Finance, the Council of Ministers has approved a preliminary draft law containing various urgent tax measures as a result of the COVID-19 pandemic.
The preliminary draft law has the following objectives:
1-Giving tax incentives for donations in kind of various medical materials and products useful in the fight against the virus
This is achieved by exempting from VAT donations in kind of medical materials and products to healthcare institutions and hospitals. In addition, costs incurred in producing and donating medical materials and products can temporarily be deducted as professional expenses.
2-Waiving income tax on the allowances granted by the Communities and Regions to businesses, the self-employed and natural persons affected by the COVID-19 pandemic
The different Regions and Communities in Belgium have taken measures to support businesses, the self-employed and natural persons affected by the corona crisis.
For example, the Walloon Region is providing compensation of 5,000 euros for businesses that are forced to shut down, while the Brussels and Flemish Regions are providing 4,000 euros. These regional payments, along with all other measures adopted by the Regions and Communities, are exempt from tax.
3-Adjusting the calculation of the increase due to no or insufficient advance payments of income tax
Under normal circumstances, the self-employed and companies making an upfront payment can receive a tax benefit. However, as a result of the corona crisis, many companies have liquidity problems, making it difficult for them to make the necessary prepayments.
To avoid penalising the companies and the self-employed when they make the prepayment later in the year, the benefits for the last two quarters have been increased.
Note that this measure only applies to companies that do not pay dividends or make capital reductions between 12 March and 31 December 2020.
4-Extending the tax deadlines for expenditure by production companies under the Tax Shelter
Production companies that can prove that they have suffered direct damage as a result of the measures adopted by the Federal Government in the fight against COVID-19 are eligible for the extended deadline.
In concrete terms, the period in which production companies have to incur expenditure is extended by six months. For the performing arts, the new period is therefore 30 months instead of 24. For the audiovisual sector, the period extends from 18 to 24 months.
The preliminary draft has been submitted to the Council of State for its opinion.
For more information, please contact :
Olivier Querinjean, Partner, Brussels Member of the Tax group
Arnout Vaninbroukx, Senior Associate, Brussels
Lancelot Decaesstecker, Junior Associate, Brussels
