Newsflash: End-of-year legislation in a nutshell

PROGRAMME ACT OF 27 DECEMBER 2021

• Reform of tax advantages for sportspersons and sports clubs: Reform of tax advantages for sportspersons has come a long way. The following measures have finally been introduced:
• • The exemption from paying wage withholding tax is capped at 75% if the tax is withheld from the entire wage and to the extent that the debtor, whose wage tax was withheld, has rendered sports performances;
  • The mandatory spending obligation for training of young sportspersons is increased to 55% of the unpaid wage withholding tax;
  • The maximum age of a young sportsperson is lowered to 23 (from the age of 26);
  • The deductibility of sports brokers’ fees as professional expense in corporate tax and tax on legal entities is capped at 3% of the gross remuneration of the sportsperson;
  • The preferential tax scheme for supplementary pensions of sportspersons has been abolished.

These changes entered into force on 1 January 2022 and apply to remunerations that are paid or granted as from 1 January 2022.

• New expat scheme: a new expat scheme entered into force since 1 January 2022 for tax residents (employees and managers) from abroad and researchers (employees) from another country who were drawn to coming to Belgium to work for a period of five years maximum (which can be extended once for a three-year period). Under strict conditions, these tax residents and researchers from abroad can apply for a special scheme relating to the expenditures proper to the employer that can be paid tax-free.
• Reform of healthcare-related regulated real estate companies (in Dutch: gereglementeerde vastgoedvennootschappen, GVVs): the cap for investments in healthcare-related real estate made by real estate investment funds (REIFs) or GVVs has been increased to 80% (from 60%) so that dividends that are paid out to investors can benefit from the reduced 15% rate of real estate withholding tax or taxation in personal tax;
• Non-deductible fines: these have been extended to apply to increases in social security contributions, tax or social security regularization fees, and sums of money that, if paid, will lead to a criminal charge being dropped;
• Tax reduction for nannies (childminders): increased to EUR 14 per day (indexed);
• Tax shelter scheme boost for start-ups and scale-ups: the maximum sums that can be collected under the existing tax shelter scheme has been increased to EUR 500 000 for start-ups and EUR 1 million for scale-ups;
• Tax-advantaged overtime with overtime pay in the construction sector: for manual labourers who work under a specific working schedule, this has been increased to 220 hours for the construction sector and 280 hours for the road construction and railway sectors;
• VAT: the supplying of furnished accommodation by small enterprises is no longer eligible for VAT-exemption.

 

ACT OF 27 DECEMBER 2021 ON VARIOUS PROVISIONS REGARDING VAT

• Renting out furnished accommodation: the supplying of furnished accommodation in hotels, motels, or other facilities that are typically provided as part of the accommodation to paid guests will be qualified as a hotel service only if the accommodations are provided for a period of 3 months maximum. For similar facilities, they must—in addition—typically provide furnished accommodations for a period of 3 months maximum. Similar facilities will moreover provide hotel services that are subject to VAT if at least one of the following services is offered, namely in-person welcome reception, available household linen for use, or a daily breakfast. If such services are not provided, the 6% VAT rate must not applied. Instead, the transaction will be VAT-exempt.

Because of this measure, renting out student accommodation is always VAT-exempt, even for the renting out of aparthotels for a period of more than 3 months.

This amendment enters into effect from 1 July 2022;

• VAT certificate for construction works abolished: the mandatory certificate for construction works carried out on private homes for the purpose of benefiting from the reduced VAT rate is replaced by a specific mention on the invoice.

 

ACT OF 21 JANUARY 2022 ON MISCELLANEOUS TAX PROVISIONS

• Introduction of a “zero” tariff rate: foreign income (taxable abroad) that are tax-exempt in Belgium are in principle considered when determining the tax rate (so-called exemption with progression clause) in Belgium. But if these types of income are taxed separately (if they are not exempt), case-law considers that they must be exempt without the progression clause. This is now laid down in the law by a 0 tariff rate for such scenario.
• Reform of the reduced-withholding-tax bis principle (known as the VVPRbis scheme, which stands for verlaagde voorheffing/précompte réduit): the VVPRbis scheme has been made more strict. We refer you to our previous newsflash (see “VVPRbis-regime: bijkomende verstrengingen” (in Dutch));
• Taxability of extra-legal pensions that are accrued overseas but enjoyed in Belgium: pensions paid out by (foreign) pension institutions will no longer be exempt, even if the accrual of the pension, the capital, or the interest is or is not built up ultimately and solely for the benefit of the plan affiliate.
• Mandatory form for copyright royalties: Royalties for transfer or concession of copyright must be mentioned on the form.
• Taxability of bonuses for professional athletes: bonuses granted by national and international sports federations after having competed in the Olympic Games, Paralympic Games, the UEFA European Football Championship, or the FIFA World Cup will be taxable at 16.5% as miscellaneous income, up to EUR 30 000 (EUR 50 040 for the year 2022).

 

ACT OF 20 DECEMBER 2021 INTRODUCING VARIOUS PROVISIONS ON TAX COLLECTION AND ADAPTING SOME PROVISIONS AS A RESULT OF THE INTRODUCTION OF THE CODE OF AMICABLE AND ENFORCED COLLECTION OF TAX CLAIMS AND NON-TAX CLAIMS

• Change to the collection procedure: if the rights of the Treasury are endangered, the tax authority can issue a payment reminder sooner, which will moreover be effective from the date of dispatch (to the debtor) or from the 3^rd business day following the date of dispatch (to the co-debtor);
• Collection of income taxes from foreign persons without legal personality having a similar company type as a domestic company: collection can be sought directly from the shareholders or the directors in proportion to their share in the capital;
• Collection of income taxes in a restructuring: restructuring-related tax debts of a company that has undergone restructuring (merger, demerger, …) can be collected from the companies that result from the operation, and this in proportion to the actual value of the net assets that each of the acquiring companies obtains.

Furthermore, there is also a draft law being drawn up at this time on “temporary support measures as a result of the Covid-19 pandemic.” Besides the extension of certain existing Covid measures, it will introduce a new measure as well: tax credit for cancelled events. Costs that have been incurred for nothing or that cannot be charged because of the cancellation of a commercial event from October to December 2021 can be converted into a tax credit of 25% (instead of a tax loss carryforward).

 

Feel free to contact Luk Cassimon (luk.cassimon@monardlaw.be or 0472/467.847), Sophie Germis (sophie.germis@monardlaw.be or 0472/80.34.22) or your usual contact at the Monard Law tax team if you wish to learn more any of above topics.