A proportional reduction in Flemish property tax may be available to companies that have experienced a significant drop in productivity (Art. 2.1.5.0.2 Flemish Tax Code in conjunction with Art. 15 Federal Income Tax Code). A similar proportional reduction is also available for real estate located in the Walloon Region (Art. 257 (4) Federal Income Tax Code). These provisions predate Covid-19 but have become increasingly relevant as a result of the pandemic.
The reduction is proportionate to the time the property (i.e. buildings or machinery and equipment) was unproductive or inactive. In order to obtain the proportional reduction in property tax, an application must be submitted to the Flemish Tax Service by 31 March 2021. For the Walloon Region, the request must be submitted within six months and three days from the mailing date of the tax assessment.
The reduction is available if four cumulative conditions are met:
1. The period of inactivity or unproductivity must have lasted for at least 90 days (180 days for buildings in the Walloon Region). These 90 (or 180) days need not be consecutive and can be spread out over an entire calendar year (representing inactivity for at least 25% of the calendar year, except for seasonal activities for which the period of inactivity may be assessed based on the usual duration of the activity).
2.The property must not have been used or generated any income during this 90-day (or 180-day) period. For machinery and equipment, partial non-use is sufficient (representing at least 25% of the cadastral income).
3.The property must not be furnished. Please note that the stringency with which this condition is applied will depend on the nature of the property.
4.The inactivity/unproductivity must be involuntary (for buildings, not required for machinery and equipment).
As this is a fact-based assessment, it will be necessary to submit sufficient and precise proof of inactivity/unproductivity.
