In March 2023, the Belgian Minister of Finance published a proposal for a broad tax reform aiming more generally at modernising and simplifying the tax system and making the system more equitable. Items of the reform included, for example, changes to the participation exemption regime, the innovation income deduction, the investment deduction regime, the partial wage withholding tax exemption for research & development, the use of the stock option plans and the tax regime of carried interest.
After several months, it appeared difficult to reach political agreement on the various aspects of the tax reform. In July 2023, the Prime Minister announced that negotiations on the tax reform had failed as no consensus could be reached. Although no major reform could be agreed upon, some tax measures were announced in October 2023 as part of the budget agreement. These budgetary tax measures are incorporated into a Program Law and have been approved on 21 December 2023 in Belgian Parliament in plenary session. The Program Law has, however, not yet been published in the Belgian Official Gazette.
Many legislative changes are typically approved by Belgian parliament before year end. In this respect, some other tax measures have been approved recently or will be approved shortly. The Belgian Parliament approved, for example, on 15 December 2023 the draft Bill that implements the Pillar Two rules and that amends the current Tax Credit for R&D to qualify as a Qualified Refundable Tax Credit under Pillar Two rules. For more information we refer to our Tax Flash of 16 November 2023.
Below, we discuss the most important budgetary tax measures. Some aspects are rather complex and will require a case-by-case analysis.
- Towards a more stringent CFC rule
- Cayman Tax: a never ending story
- Two Specific Anti-Abuse Rules brought in line with EU Law
- Additional tax for Specialised Real Estate Investment Funds (“FIIS/GVBF”)
- Increased registration duties on long-term leases and rights to build
- Annual tax on credit institutions, collective investment undertakings and insurance companies
- Expansion of and limitation to flex jobs scheme
- Fiscal work bonus increased
- VAT and excise duties
