Introduction
Last week, Belgium approved its federal budget for 2023 – 2024.
The new budget agreement will have a tax impact for individuals and companies established or operating in Belgium. Below is an initial discussion of the tax measures announced in this context.
Individuals
The highlights in the Belgian Budget are as follows:
| Curtailment to aspects of the copyright regime | At present, copyright income is subject to withholding tax of 15% following the deduction of lump sum expenses of up to 50%. This will be curtailed over a phasing in period of two years. |
| Tax relief for second homes | From 2024, tax relief for second homes will be abolished. |
| Flexi job scheme extension | The scope of the flexi jobs regime will be extended with an increase in hours for student jobs. |
Companies
The prime cuts of corporate measures in the Belgian Budget are as follows:
| Employer contributions on indexed wages | There will be a reduction for employer contributions on indexed wages. This applies to contributions for quarters one and two of 2023. |
| Restriction on offset of carried forward tax losses | Tax losses from earlier periods are restricted if the profit of the current taxable period is in excess of €1m. For the 2023 year, large companies would be able to offset only 40% (as opposed to 70%) of profits that exceed €1m against carried forward tax losses. |
| Restrictions to deduction for risk capital | From financial year 2023, the application of the deduction for risk capital will be restricted. |
| Energy Producers Profits Tax | For energy produced between 1 January 2022 and 1 November 2022, there will be an excess profits tax on profits above €180 per MWh. This is a retrospective tax. From November to June 2023, excess profits above EUR 130 per MWh will be taxed. |
Indirect taxes
The main indirect tax measures are as follows:
| Excise taxes on tobacco | An increase in tobacco excise duties was announced |
| Excise taxes on e-cigarettes | Further, the introduction excise duty on e-cigarettes was unveiled |
| Eco tax on polluting packaging | The tax on polluting packaging was extended |
It is worth noting that the budget has not yet been finalised at this stage so there might be changes or revisions to these proposals.
If you have any queries about the Belgian budget and the proposed tax changes, or Belgian tax more generally, then please do not hesitate to get in touch.
The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article.