News from Panis

Belgian government announces corporate tax reform

The Belgian Government reached an agreement on a corporate tax reform. The reform will be implemented in two stages in 2018 and 2020. Panis highlights the key points of this plan that affect the diamond sector. Most important key point is a gradual drop of the company tax rate. For large companies, the general tax rate of 33,99% becomes 29,58% for income year 2018 (tax assessment year 2019), and 25% for income year 2020 (tax assessment year 2021).

Benefit of advance tax payments

By making advance tax payments, your company can avoid a tax surcharge on the corporate tax. If the advance tax payments are made on a regular basis and before specific dates, your tax position can be optimized.

Carat tax regime not applicable to diamond brokers

The carat tax regime is not applicable to diamond brokers.

The definition of a ‘broker’ can be found in the Q & A on the AWDC website, under Question 5.

A broker is an intermediary who sells diamonds in name and for account of a principal, and never becomes the legal owner of the merchandise. (S)he charges a commission fee and does not realize any turnover from diamond trading.

The broker must be able to proof that (s)he is acting for the account of a principal, and not trading from the own diamond stock. Following indications might prove this practice:

New european legislation regarding interest limitation

On 28 January 2016, the European Commission released the Anti-Tax Avoidance Directive that will be implemented in Belgium law before the end of 2018. Up to now the Belgian legislator has not taken any initiative, but since the implementation will have an in impact for all Belgian companies, Panis wants to inform you upfront.

Base erosion and profit shifting (BEPS) and transfer pricing (TP) regulations impose new reporting requirements

Last year Panis informed you about the implementation of the new Belgian law regarding transfer pricing.

Meanwhile the Belgian Government has issued the final forms and filing instructions.

The filing will have a significant impact on the workload for companies which are part of an international group. Depending on your structure, up to three reporting forms are applicable.

Update carat tax

Yesterday 15th of December Members of Parliament voted the carat tax law which is approved.

Panis will keep you updated on the exact content once the final text of the law is available.

Update carat tax

On the 16th of December Members of Parliament will vote on the carat tax law.

The carat tax is likely to be passed and will be applicable to tax assessment year 2017 i.e. income year 2016 for companies that close their financial year on the 31st of December 2016.

Panis will keep you informed about the carat tax.

Update carat tax

Government still wants to implement the carat tax for tax assessment year 2017 (income year 2016 for companies closing their accounts on the 31st of December 2016). The law is now in Parliament for voting, but it is not approved yet.

Commission authorises carat tax for wholesale diamond sector in Belgium

The European Commission has found that Belgian corporate tax provisions applicable to the wholesale diamond sector were in line with EU State aid rules. The provisions do not selectively favour certain companies and therefore involve no State aid within the meaning of EU rules.

Please read the full press release of the European Commission through following link:

Please feel free to contact Panis for more information.

New legislation on transfer pricing reporting

The initiative of the Organisation for Economic Cooperation and Development (OECD)  to tackle Base Erosion and profit Shifting (BEPS) has been incorporated in the Belgian Program Law of 1 July 2016 requiring transfer pricing documentation.

Belgium’s legislation aligns itself with the OECD guidance by adopting a three-tiered approach to transfer pricing reporting. Mandatory are: a Master File, a Local File and a Country-by-country report.