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Belgium Approves Program Law including Extension of the Liquidation Reserve for SMEs and a New Transparency Tax — Orbitax Tax News & Alerts

On 24 July 2015, the Belgium Chamber of Representatives approved the Program Law Bill presented by the government in June ({News-2015-06-11/P/2- previous coverage}). The Bill:

  • Extends the availability of the liquidation reserve for SMEs to include the 2013 and 2014 tax years - the regime allows the allocation of up to 100% of after tax profits to a liquidation reserve subject to a non-deductible tax of 10%, and the reserve can then be distributed tax-free upon liquidation;
  • Introduces a transparency tax on deemed income in the hands of Belgian founders/shareholders of trusts, foundations and other structures if exempt from tax or subject to an effective tax rate under 15% - exemptions apply for collective investment vehicles, listed companies, and certain other cases; and
  • Introduces new start-up incentives for the digital sector, including an individual income tax credit of up to 30% for investment in the shares of SMEs and 45% for micro-enterprises, a 10% exemption from wage withholding tax for the first 4 years (20% for micro-enterprises), a 13.5% tax credit for investment in digital assets, and others.

The Bill as approved is expected to be published in the Official Gazette in the next few weeks.

Note - This article previously included that a reduced dividends withholding tax rate of 1.6995% had been introduced. However that reduced rate was introduced through a ({News-2016-01-15/A/6- subsequent program law}).