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| “The
avoidance of tax may be lawful, but it is
not yet a virtue .” |
| (Lord
Denning) |
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| News |
Belgian
Risk Capital Deduction to Enter Into Force on
1 January 2005
Date:
5 August 2005
A law introducing a risk capital deduction for
Belgian companies has been signed into law, fulfilling
a promise made earlier this year by Finance Minister
Didier Reynders. The deduction amounts to between
3 and 4 percent of a company's equity (share capital
plus retained earnings).
The law also provides for the abolition of the
0.5 percent capital duty on contributions to a
company's share capital, replacing it with a fixed
capital duty of €25.
The House of Representatives adopted the bill
on June 2 and the Belgian Senate did not opt to
review it, clearing the way for King Albert II
to sign it into law. The law was published in
the official gazette on 30 June 2005, and will
enter into force on 1 January 2006.
This new tax regime will replace Belgium’s
existing coordination center tax regime, which
is set to expire in the next couple of years.
However, any Belgian company or permanent establishment
can begin operating as a coordination center for
a group of companies without being subject to
the approval period that used to be in force for
coordination centers. If a new coordination center
has sufficient capital, it can provide all sorts
of preparatory and auxiliary services to a group's
companies. These include insurance and reinsurance,
the centralization of financial operations, the
hedging of foreign exchange risks and centralization
of accounting, administration and data processing,
sales promotion and advertising, the collection
and distribution of information, scientific research,
and relations with national and international
governmental institutions. |
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© Vandendijk
& Partners - Advocaten - Avocats - International
Tax Law
rue Edith Cavell 66 - B-1180 Brussels -
Tel +32 (0)2 343 33 45 - Fax +32 (0)2 343
41 45 |
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