News from Panis

Recuperation of foreign withholding taxes

Tax payers who receive interests and/or dividends on foreign bank accounts, may (partly) recuperate the withholding taxes paid abroad in order to avoid double taxation, as they are taxed in Belgium at a tax rate of 25 per cent.

If you receive financial income abroad, and would like to find out if recuperation of withholding taxes would be suitable in your situation, please contact Panis.

Carat tax waiting for approval by European Commission

The law on the carat tax system, by which diamond companies will be taxed on 0,55 per cent of their turnover, was published in the Belgian State Gazette on the 18th of August 2015.

Last paragraph of the law mentions that it will be applied from tax assessment year 2016 onwards - income year 2015 for most companies-under the condition that is approved by the European Commission.

Most probably we will receive some feedback before the end of this year.

Prohibition on cash payments of salary

As from 1st of October 2016 cash payments of salary to your employee(s) will be prohibited. You will have to pay by bank transfer.

Anyhow, implicit agreements, sector agreements and - habits might foresee in an execption to this rule. At this moment it is uncertain if such would also apply to the diamond sector. A royal decree will set out the new rules and procedures.

Panis will keep you informed as soon as more details are available.

Bank accounts for sole traders

It is no longer problematic for diamond traders who act as a sole trader to open bank accounts for diamond business.

According to our findings, a bank in the Antwerp diamond market is willing to open them soon.

Please contact Panis for more information.

Automatic exchange of bank account information between Switzerland and Belgium from 2018 onwards

In 2017 the Swiss tax authorities will start to gather bank account information of non-residents, which will be automatically exchanged with the tax authorities of other EC countries as from 2018 onwards.

All details of the bank account such as the name, address and birth date of the account holder, but also the balance of the account and the income generated through the account (interests or dividends) will be communicated.

Reporting foreign bank accounts to the Central Point of Contact (CPC) of the National Bank of Belgium

If you were holder of a foreign bank account in 2014, this must be reported to the Central Point of Contact of the National Bank of Belgium (CPC), at the latest at the time the income tax return is submitted for the assessment year 2015.

Moreover, any person who was a holder of a foreign bank account in 2011, 2012, and 2013, and who declared the existence of the foreign bank account in the income tax return of a previous assessment year, must report this account to the CPC, even if the bank account was closed in the meantime.

Grant a power of attorney to protect your interests in case of legal incapacity

If you are no longer capable of taking your own decisions and managing your estate due to illness or an accident, and you are legally incapacitated, a judge will appoint someone to do this for you.

Thanks to new legislation you can now decide for yourself who will protect your interests when that time comes. With a simple power of attorney you can freely appoint the person who – on your behalf – can perform a number of estate transactions that you select and this at a time when you are no longer legally capacitated.

For example, you can grant a power of attorney for:

Update carat tax: tax on 0,55% of turnover

Diamond dealers will have to pay taxes on 0,55% of the turnover (sales), according to the draft of the new law that government wants to approve.

The percentage of 0,55% should reflect "a market consistent average". With this new law Treasury estimates to raise an additional income of 50 million euro through taxes.

Example:

Turnover (sales) of $ 10.000.000 x 0,55% = $ 55.000 taxable profit
Taxable profit of $ 55.000 x 34% tax rate = $ 18.700 taxes

Update declaration Diamond Office

After the publication of our topic about the Diamond Office declaration that diamond dealers sign in case of a discrepancy between the declared value and the determined value by the ex-pert, Panis had a meeting with AWDC and FPS Economy, SME’s, Self-employed and Energy.

Our previous article needs to be clarified and rectified to a certain extent.

Valuation of diamonds at the moment of import and export is carried out by the diamond experts of the FPS Economy, SME’s, Self-employed and Energy.

AWDC press release on carat tax

AWDC released on 30th of March following communication with respect to the carat tax:

“Antwerp Diamond industry prepared to pay more taxes in exchange for stable and legally certain fiscal environment

Antwerp, 30 March 2015 – The AWDC has taken note of the government decision to introduce a tax system calculated on a lump-sum basis. “Diamantaires are willing to pay higher taxes in exchange for financial predictability and legal certainty”, says Ari Epstein, CEO of the Antwerp World Diamond Centre.

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