BELGIUM: Personal taxes go up due to corporation tax cut
Extra taxes on high-net-worth individuals will now cover the reduced corporate income tax rate of 25%, as proposed by the Belgian government. This will include the introduction of a 0.15% annual tax on taxes on reimbursed share capital and on securities accounts. The new tax will also involve the continuation of supposed ‘Cayman tax’ on trust incomes, foundations and other entities that exist in jurisdictions with low tax rates.
Head of KPMGs corporate tax practice in Belgium, Dirk Van Stappen, favourably believes in the new decision to minimise the corporate income tax rate. Van Stappen believes that it is essential in order to allow Belgium to appeal to foreign investors and maintain the business community established in Belgium.
By 2020, the Belgian government is also contemplating suggestions to further reduce corporate tax to 20%. However, the budget deficit may be financed through other methods such as an increase of withholding tax from 27% to 30% or a decrease in tax deduction schemes.
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