What happened with the tax penalty of 5%?

In a previous article we already discussed the tax penalty of 5% for corporations who don’t pay the minimum of 45.000 euro to at least one of their managers. This measure was applicable since 1 January 2018. The goal of this measure was to avoid that self-employed allocate their activities in corporations to avoid taxes.

However, experts criticized that this measure was in fact a double sanctions for SME’s. A SME’s who didn’t payed the minimum remuneration of 45.000 was not only excluded from the advantageous tariff (20% on the first 100.000) but also were obliged to pay an extra tax of 5%. The measure was also very complex. Therefore, has the legislators decided to abolish this tax penalty immediately.

Sources (Dutch): IAB Studiedienst, Delbo advocaten

How to calculate the exemption of social liabilities in 2019?

Because of the introduction of unification of servants and workers, the total costs for some companies increased significantly. Therefore, the government introduced the exemption of social liabilities on 1st of January 2019. This also applies for employers who were not negatively influenced by the unification law.

How will this exemption be calculated? It is calculated as three weeks’ worth of remuneration per year of service. This amount is limited up to 100% of the remuneration on the first scale of €1.500, 30% of the second scale until €2.600 and does not apply to remunerations above €2.600. On top of this, starting from the 21st year of service, the number of additional weeks will be limited to one. This exemption will be spread over 5 years with 80% in the first year and 20% in the remaining years. The exemption can only be applied if the employee enters his/hers 6th year of service.

To be taken into consideration for this exemption, the employers has to hold a normative list of his employees and have a positive taxable result.

Source: Fiscal pro, number 4 (2019)

VAT-regulations for vouchers changed from 1/1/2019

The regulations concerning vouchers has become a national law since 1/1/2019. This only concerns vouchers that give notification of conditions and vouchers that can be exchanged for a delivery of services or good, thus it does not include discount coupons.

For so-called single vouchers, or vouchers where the VAT is already known, the VAT is payable from the moment the voucher is made up. For instance a voucher that you can redeem for a beverage basket. Hereby, you already known the VAT (21%) beforehand. In case the voucher is not redeemed within the agreed period, the VAT cannot be recovered.

In case of multiple use, or vouchers where the VAT amount is not known beforehand, the VAT is payable when the voucher is redeemed. For instance, a voucher for a restaurant visit. When you make up the voucher you don’t know whether the person will use it for beverages (21%) or for meals (12%). In case of non-use of the multiple vouchers, there will be no VAT since the VAT is only calculated when redeemed.

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Allocating advantages from offshore? Pay attention!

Many international corporations allocate their so-called RSU’s to their Belgian employees. A RSU, or restricted stock unit, is a free share that will be distributed definitely later. For instance, after reaching a certain objective. Because RSU’s are only definite somewhere in the future, the employee was only obliged to take it into account in his personal taxes in the year that it became definite.

Also, since there were not special regulations concerning these RSU’s, corporates were not obliged to hold a fiche. With the introduction of a new KB, this will no longer be the case. In addition, the NOSS has also changed his definition of remuneration. This means that these RSU’s are now also subject to NOSS.

Should you pull up the remuneration of the manager/director to €45.000. 

There is a lot of discussion whether or not it is a good idea to increase the salary of the manager to at least €45,000. According to the new legislation non-compliance will lead to a tax penalty.

If the salary is insufficient for the reduced rate, then the company will not be able to apply the reduced rate in corporate income tax. In addition, there will be an additional special tax of 5% in 2018 and 2019 (10% from 2020) on the difference between the threshold of €45,000 and the effective granted remuneration. This additional special tax is deductible.

But is it necessary to lift the remuneration up to €45,000? This depends on several factors. The Bibf has made a nice piece that  we do not want to withhold (in Dutch).

Would you like to see the calculations be applied to your file, please reach out to your file manager.

What will change in the new company law for you? (UPDATE)

With the approval of the new company law there will be a number changes from May 1, 2019. What does this mean in practice for you and your company? We summarize the most important points.

  • Firstly, the number of forms of companies will be limited to four, namely BV, nv, CV and the partnership. However, there is a transitional period until 1 January 2020 to adjust your form of company. For adjusting the Articles of Association you even have time until 1 January 2024.
  • Secondly, BVBA is replaced by the BV or the private company. This BV is also the new primary form of company instead of the nv. As a result, it is no longer necessary to keep a minimum capital, according to the new regulation this must be available in adequate equity.
  • Thirdly, if you wish to extract capital from the BV’s capital through a dividend payment, you will be forced to apply to the so-called double benefit test.  More specifically, you should be able to demonstrate that the net assets will not be negative after the dividend payment and that you have sufficient resources after the dividend payment to satisfy your debts on the short term.
  • Fourthly, the BV can now also distribute shares with multiple voting rights, if approved by at least 75% of the total votes and if it the shares are at least 2 years registered. It will also be easier to transfer these shares. Before you needed approval of all partners.
  • Fifthly, the CV is now exclusively for companies which are really cooperative and therefore it is no longer suitable for groups of professions. The most obvious choice for such CV’s is a conversion to a BV. Agaian, there is a regularization period.
  • Sixthly, it is now sufficient to have one manager for both nv and the Belgian private law Foundation. In addition, the manager can be statutory appointed and therefore harder removable.

Also for non-profits there will be a change, these will now be allowed to have unlimited profits. However, this profit (obviously) will not to be distributed.

Finally, there is an adjustment on the managers liability. For all casual light errors is the managers liability is limited according to the size of the enterprise, this may vary between €125,000 and €12 million.

Sources: De Tijd (2019); Nieuw wetboek vennootschappen en verenigingen voor cijferberoepen, (2019)

New bank account number for prepayments

Both for companies as individuals, the bank account number for prepayments changes in tax year 2020 (2019): BE61 6792 0022 9117 from ‘Inningscentrum – Dienst Voorafbetalingen, Koning Albert II-laan 33, bus 42, 1030 Schaarbeek’.

The structured communication for natural individuals and self-employed (who were using their national number for identification of their prepayments) will be changed and will be noted on the payment invitations.

There is a transition measurement for companies were the fiscal years doesn’t coincides with the calendar year and for companies were the remaining days of fiscal year 2019 are after the 31st of December 2018.

The payments made after this date, but still before tax year 2019, must be payed on the existing account: BE20 6792 0023 3056 – ‘Dienst Voorafbetalingen- vennootschappen’. These companies need to make their first payment on the new bank account number starting from tax year 2020.

If you want to know more, feel free to ask one of our staff members or leave a comment.

What with your salary if you are a business leader in two companies?

There is such thing called the ‘ fine ‘ on wage deficit (5.1%), this appears if the company does not meet the minimum remuneration of €45,000, or at least the taxable profit as a remuneration to the business leader if this is lower than €45,000.

If you are the manager of two or more (connected) companies then there is a special arrangement. According to this scheme, a total remuneration of €75,000, instead of the number of companies multiplied by €45,000, is sufficiënt.

Imagine you are a manager in two connected companies. In one company you have a remuneration, in the other you don’t. In this case, it is not always wise to have a salary in both companies (and thus avoid the fine) as this can result in a higher income tax. It might increase the persons taxes is greater amount than avoiding the fine.

An illustrative example:

You are a manager in two companies, a bvba and a nv. From the bvba you retrieve a wage of €55,000, from the nv for the time being, nothing. Set the nv has a taxable profit of €100,000. To meet the requirements you would also have to pay a wage of at least €20,000 to avoid the fine. However the fine only is €1,020 (5.1% of 20.000) while the increase in personal tax amounts to €10,800.

Source: Tipsenadvies-belastingen.be (2018)