Long awaited tax reforms announced by the Government

January 1, 2012

Following an agreement between Belgian political parties to form a government a Tax Bill has been passed.  A summary of the main tax measures announced in these budgets, and which may be of relevance to CELIA Enews readers, are set out below.

Capital gains on shares

For individuals the situation remains unchanged.  That is, gains on shares sold by an individual in the normal management of their personal assets are tax exempt.  Other capital gains remain subject to taxation at 16.5% or 33%.

Taxation of stock options

The rate of tax of stock options was increased from 1 January 2012.  The rate to determine the benefit in kind has been increased from 15% to 18% (or from 7.5% to 9%).

Benefits in kind

From 1 January 2012 the taxation of company cars, as a benefit in kind for employees, is based upon CO² emissions and the vehicle’s catalogue price.  Employers are subject to an additional non-deductible expense of 17% of the value of the benefit in kind for use of a company car.

The taxation of free housing, heating and electricity, as a benefit in kind for directors, will increase.  For free housing this increase will be achieved by applying a higher coefficient to the indexed cadastral revenue (that is, a notional annual rental income value of the property, as set by the governmental property register) to determine the taxable benefit in kind.  This change has not yet been enacted.

Withholding taxes on dividends and interest

From 1 January 2012:

Occupational pension plans

Both the 80% rule which determines the tax deductibility of employer contributions and the tax reduction for employee contributions areto be reviewed.

The internal provision of pensions will have to be externalised and this will result in the application of insurance tax.  This change has not yet been enacted.

Other tax changes

For further information or to discuss any of the issues raised, please contact Jean-Louis Davain or Soubiha Ouamari on +32 2 743 4345.


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