Corporate Tax 2010 - BMR Advisors

Eubelius
Belgium
Belgium
Registration duties apply to certain types of transactions, provided
that they are subject to the formality of registration (whether or not
compulsory):
(i) Real estate transfer tax
Transfer of real property in Belgium is subject to a 12.5% registration
tax. In the Flemish region, that transfer tax rate is reduced to 10%. In
the event of a resale of the real property within 2 years, part of this
transfer tax (up to 60%) can be recovered by the taxpayer.
Provided that certain conditions are respected, a professional real
estate trader can benefit from a reduced rate of transfer tax, which
varies between 4% and 8% depending on the Region in which the
real estate is located.
The real estate transfer tax can, subject to certain conditions set
forth by the Belgian Ruling Committee, be reduced to a mere 0.69%
through a “split sale” structure, which implies the vesting of a long
lease right (0.2% registration tax, see below) followed by the sale
of the freehold to another (related) person (10%-12.5% transfer tax
on a reduced base).
The transfer of buildings that are considered to be “new” (until 31
December of the second year following the year in which the
building is used for the first time) and that is subject to VAT, will be
exempt from transfer tax.
(ii) Rental and leasehold contracts
Rental and leasehold contracts in respect of real estate in Belgium,
as well as the transfer thereof, are subject to a 0.20% registration
duty on the total sum of rental payments and charges to be borne by
the lessee during the (remaining) term of the contract.
(iii) Other registration duties
The grant or transfer of a mortgage on real estate in Belgium will in
principle trigger a 1% registration tax due on the amount guaranteed
by the mortgage. Reduced registration tax may be applicable for
registration of certain types of security documents.
As from 1 January 2006, contributions in cash or in kind to the
capital of a Belgian company are no longer subject to a capital duty.
The contribution by an individual of residential real property in
Belgium, however, will trigger real property transfer tax.
Transactions that are exempt from proportional registration duties
are still subject to a fixed duty of €25 upon fulfilling the registration
formality.
However exemptions apply for:
some social services (among others. medicine, elderly
homes, education);
supply and leasing of real estate (with the exception of a
supply of a “new” building (see supra);
insurance, banking and other financial services;
management of a collective investment fund, or a pension
fund that has been set up or converted in a specific legal
form;
legal services (lawyers, notaries, bailiffs); and
a transfer of a universality of goods or a business unit (in the
context of corporate reorganisations), subject to certain
conditions;
2.4 Is it always fully recoverable by all businesses If not,
what are the relevant restrictions
Input VAT is only recoverable by a VAT taxpayer. Deduction of
input VAT from output VAT due, or refund of excess input VAT, is
limited to supplies of goods or services that are acquired by the VAT
taxpayer for the performance of services and/or supply of goods
that are subject to VAT. No such deduction or refund is allowed for
goods or services that are used for other (exempt) activities. If a
VAT taxpayer engages in VAT and non-VAT activities, the amount
of deductible or refundable input VAT is determined proportionally
to the turnover that arises from the VAT activities compared to the
overall turnover. Alternatively, the VAT taxpayer may apply (and
the VAT authorities may also oblige him to do so) for permission to
deduct input VAT based on the actual use that is made of the
relevant goods and services. In that case, goods and services that
are not attributable to a specific activity (e.g. overhead costs), must
be attributed based on an allocation key that reflects reality as
closely as possible.
In April 2007 a VAT consolidation system entered into effect in
Belgium. Subject to the fulfillment of certain conditions and
formalities, a group of Belgian enterprises may decide to form a socalled
“VAT-unit”. Transactions between members of such unit
generally are without the scope of the VAT-system. Any restrictions
on deduction of input VAT is measured at the level of the VAT-unit
as a whole.
26
2.2 Do you have Value Added Tax (or a similar tax) If so, at
what rate or rates
Belgium has adopted a VAT system in conformity with the relevant
EU Directives. Currently 3 rates apply:
6% on necessities and services of a social nature (e.g. food
and water), pharmaceutical products and, subject to certain
conditions, work related to real estate;
12% on fuel and the supply of social housing (if not exempt)
and works related thereto; and
21% (general rate) on all other goods and services.
2.3 Is VAT (or any similar tax) charged on all transactions or
are there any relevant exclusions
Generally, VAT is due in Belgium on: (i) the delivery of goods or
services supplied by a VAT-registered person that take place in
Belgium for VAT purposes; (ii) the import of goods into Belgium;
and (iii) acquisitions of goods from another EU Member State
(intra-Community acquisitions) that take place in Belgium for VAT
purposes.
2.5 Are there any other transaction taxes
Stock market transactions are subject to a transaction tax of 0.07%,
0.17%, 0.50% or 1.1% (depending on the type of securities and the
type of transaction), due by both buyer and seller, with a maximum
of €500, and in some cases €750, per transaction and per party.
Some market participants, such as non-residents (under specific
conditions) and some institutional investors, are exempt from this
tax. Further to a decision of the European Court of Justice in 2004,
subscription to newly-issued securities is not subject to this stock
market tax.
Physical delivery of securities, as a result of: (i) their acquisition
(for consideration); (ii) conversion of registered securities into
bearer securities; or (iii) withdrawal of securities that have been
deposited with a financial institution, is subject to a tax of 0.6% on
their value. No maximum applies. However, the Belgian
legislature has issued legislation providing for the abolition of
bearer securities in Belgium. Such securities may no longer be
issued as of 1 January 2008 and all existing bearer securities must
be converted into registered or dematerialised securities by 2014.
WWW.ICLG.CO.UK
ICLG TO: CORPORATE TAX 2010
© Published and reproduced with kind permission by Global Legal Group Ltd, London