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taxation.be

Friday
Mar 22nd
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taxbites

European Savings Directive

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Written by Administrator Tuesday, 14 June 2005
It's here to stay. After more than twenty years, the European Savings Directive will enter into force on 1 July. What does it mean for you. (More …).

Supreme Court Defines VAT- Recoverable Promotion Expenses

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Written by Administrator Monday, 23 May 2005
In an April 8 decision, the Belgian Supreme Court settled a long-running debate over the distinction between business entertainment expenses and business promotion expenses.

Under article 45, section 3 of the Belgian VAT Code, a VAT payer can recover the VAT on all business expenditures except business entertainment expenses. However, the distinction between business entertainment expenses and business promotion expenses has long been a gray area. (Read the article …)

When you disagree with the taxman

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Written by Administrator Friday, 13 May 2005
Sometimes you have to disagree with your tax inspector. This gives a short summary of how to do it. (More …)

The Gateway between Europe and the Far East

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Written by Administrator Sunday, 01 May 2005

The double taxation agreement signed between Belgium and Hong Kong in 2003 is a good conduit for repatriating profits between Europe and Hong Kong, or for financing investments in Europe or in the Far East. With the publishing of an administrative note, the Belgian tax authorities have highlighted the strengths of the treaty, and Belgian Finance Minister Reynders is proud to present this new treaty as the “gateway� between Europe and the Far East.

This article explores various strategies using the current income tax treaty in force between Belgium and Hong Kong. Those strategies include creating holding company structures and other arrangements to repatriate profits between Europe and Hong Kong and to finance investments in both Europe and the Far East. (Read the article …)

Belgium Clarifies Repatriation Issues in Hong Kong Tax Treaty

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Written by Administrator Monday, 18 April 2005
In a March 31 administrative note, the Belgian Ministry of Finance has clarified some issues in the Belgium-Hong Kong double tax treaty that are relevant for the repatriation of profits to Belgium.

The administrative note makes the treaty an interesting conduit to repatriate profits from the Far East to Belgium, as a Belgian company can repatriate profits without any major withholding tax in Belgium or Hong Kong. (Read the article …)

The unbearable lightness of the expatriate tax regime

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Written by Administrator Thursday, 31 March 2005
The Belgian Court of Audit criticised the Belgian expatriate tax regime. The news is not all that bad. (More …)

That House at Home

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Written by Administrator Tuesday, 22 March 2005

This contribution may make that little farmhouse in the Algarve just a little bit more attractive ? Belgian income tax on property abroad. (More …)

Belgium Finalizes Plans for Risk Capital Deduction

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Written by Administrator Monday, 14 March 2005
Belgian Prime Minister Guy Verhofstadt and Finance Minister Didier Reynders on March 4 announced that the government has finalized its plans to introduce a fictitious, or notional, interest deduction to encourage companies to self-finance their investments and to strengthen their capital structure.

The new measure, which also would reduce the discrimination between equity and borrowed funds, is intended to replace the tax regime for coordination centers, which will expire at the end of 2010. Under the current regime, the interest paid on borrowed funds is a tax-deductible expense, and the withholding tax on that interest is limited to 15 percent. However, the return on equity contributed to shareholders in the form of share capital is not guaranteed, and distributed dividends are not tax-deductible for the company and are fully subject to corporate income tax. Moreover, the company must withhold tax at source at a rate of 25 percent. (Read the article …)

Supreme Court leaves fate of stock options undecided

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Written by Administrator Thursday, 10 March 2005
On 4 February 2005, the Belgian Supreme Court, the Cour de Cassation has handed down a decision that will be quoted by the tax authorities in many litigations to come. (More …)

 

Belgium Exempts Profit Participations From French Property Investment Partnership

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Written by Administrator Monday, 07 March 2005
Belgium’s Cour de Cassation, has confirmed that dividends paid out by a French société civile immobilière (SCI, or property investment partnership) are not subject to Belgian income tax.

Under French law, certain civil companies are deemed to be separate from their shareholders (personne morale) contrary to Belgian law. That is particularly the case for the SCI. (Read the article …)

ECJ to Examine Belgian Tax Treatment of Inbound Dividends

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Written by Administrator Monday, 28 February 2005
The Ghent Court of First Instance has sought a preliminary decision from the European Court of Justice on whether Belgium’s tax regime for inbound dividends is compatible with EU law.

One of the basic principles of the Belgian income tax system is that a dividend received by a resident individual is subject to a 25 percent withholding tax. That withholding tax is the final tax for the taxpayer, meaning that he does not have to declare the dividend in his tax return.

However, if no tax has been withheld at source, either by the company distributing its profits or by the intermediary (usually a bank), the taxpayer must declare the dividend and pay income tax at a rate of 25 percent.

Belgium taxes inbound dividends the same way. However, under the provisions of Belgium’s double tax treaties, the country where the dividend originates can withhold tax at source on the dividend before it is paid out. Belgium grants unilateral relief to prevent double taxation by applying the deduction method: The foreign tax is deducted from the gross dividend before the Belgian tax is calculated. The Belgian 25 percent withholding tax (or, alternatively, the final income tax) is calculated on the net dividend after deduction of the foreign withholding tax. (See below. (Read the article …)

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