Category: News

Since the adoption of the law relating to money laundering and terrorism financing prevention dated September 18^th, 2017, every company, non-profit (international) organization, foundation and trust must identify and register its beneficial owners via the platform known as the “UBO Register”, and this since September 30^th, 2019 (administrative tolerance until December 31^st, 2019).

Following the recent publication of a Royal Decree, a new documentation obligation was added to the existing one. Indeed, the Royal Decree in question provides that all information providers are now required to provide via the platform any piece of document demonstrating that the information recorded is “adequate, accurate and up to date”.

This documentation formality must be complied with by April 30^th, 2021 at the latest. An administrative fine of EUR 250 to EUR 50,000 may be applied to the directors of the concerned companies, non-profit (international) organizations, foundations or trusts in the event of non-compliance with their disclosure obligation but also in the event of poor quality of the data disclosed.

As a reminder, we would also like to point out that any change of beneficial owner must be reported in the “UBO Register” within one month of such change.

Tax Consult follows the news of the new measures taken and applied by the Authorities on a daily basis and is regularly in contact with the (tax) Administration. In case of question, do not hesitate to contact directly your file manager or our team using the address info@taxconsult.be in order to receive a tailor-made advice adapted to your situation.

Tax Consult A & A

Belgian withholding tax obligations

April 27, 2020

In a previous newsletter, we have drawn the attention to new legal provisions according to which any Belgian taxpayer subject to Belgian company income taxation, Belgian individual income taxation, or Belgian non-resident income taxation will be fictively considered as having paid or attributed remunerations paid by a related foreign company to an employee who performs professional activities to the benefit of the Belgian taxpayer.

In an administrative circular dated 7 April 2020, the Belgian tax authorities have provided guidance on the scope of application of the above-mentioned fiction.

According to the Belgian tax authorities, it is not necessary that the employee has an employment contract with the Belgian taxpayer subject to Belgian income taxation. It is necessary and sufficient that the remunerations relate to professional activities falling within the daily activities of the Belgian taxpayer as set out in its bylaws. The fiction may therefore apply to remunerations paid in accordance with a secondment contract.

This position is in clear contradiction with the ratio legis of the new provision, as set forth in the travaux préparatoires of the law. Nevertheless, it does generate new withholding tax obligations – and hence individual tax form (« Fiche 281.10 » or « Fiche 281.20 »)  obligations – within international groups of companies.

Should this new position be applied as it stands by the Belgian tax authorities, we recommend to do a case-by-case study and, more particularly, to look at the intra-group allocation of salary costs as well as re-invoicing methods.

We are currently in contact with the Belgian tax authorities to get confirmation of their interpretation.

Secondment of staff: The Court of Justice of the European Union takes a position on VAT matters

April 27, 2020

 According to a judgement published on March 11, the Court of Justice of the European Union confirmed that the re-invoicing of the costs of an employee that a company places at the disposal of one of its subsidiaries in capacity of “manager” has to be considered as a transaction subject to VAT.

In accordance with the VAT legislation, the secondment of a director to a subsidiary in return for payment of an amount of money is considered to be a legal relationship in which reciprocal services are exchanged. The Court consequently states that this transaction is taxable from a VAT perspective, first, even if local VAT or local tax legislation might suggest a different rule and, second, even if the amount of the amount paid is equal to, greater than or less than the costs incurred.

Limited to the request of the applicant, the Court does not rule on the question of the retrocession of remuneration of a member of the boards of directors. This is the case when, for example, an individual is appointed director in another company or subsidiary. Although similar in appearance, the situation is nevertheless (totally) different since the legal relationship is no longer between two companies but between an individual and a company. The retrocession of the remuneration of the members of the boards of directors would therefore not be subject to VAT, considering this transaction as outside the VAT scope. Based on the legal doctrine, arguments exist to defend the position that such a retrocession is not subject to VAT.

Furthermore, even if the question is not covered by the judgment either, the Court seems to defend de facto the existence of fixed establishment for subsidiaries and, potentially, for foreign branches. In other words, such entities should have their own existence from a VAT perspective in the countries where they are located.

In conclusion, this judgment, which is by no means insignificant, suggests important consequences in terms of optimization and more particularly in terms of cash flow. On the one hand, the secondment of a person within a subsidiary, in an appropriate manner, could make it possible to avoid pre-financing VAT by considering this transaction outside the scope of the tax. On the other hand, the existence of a permanent establishment abroad could also avoid pre-financing of VAT on cross-border transactions.

As with any optimization measure, a study of the context and the situation in each individual case is necessary to define as accurately as possible the advantage which the company could enjoy.
We therefore remain at your disposal to foresee any measure that could be valuable to your company’s cash flow.

Dear Client,

Tax Consult is doing everything possible  to minimize the impact of the Corona virus on its operations and has taken several actions  to ensure business continuity and reduce the risk for our employees, our clients and partners.

Specific steps taken by TC on the Corona virus:

• Our staff is no longer allowed to participate  in general meetings. All meetings planned will be postponed or carried out online. We do our upmost best to guarantee full business continuity.
• Employees are given instructions in line with measures from federal health department  to minimize spreading. Hand sanitizers are available in the office.
• Employees returning from risk areas abroad will be requested to work from home for the full length of the incubation period.

Technical modalities:

• All employees have laptops and are reachable by phone and/or mail
• If required, we are capable of moving to a homeworking only policy until further notice.

The Board and an ad hoc Team are closely following latest developments and any announcements by the Belgian authorities might rise to new measures.

We thank you for your support and trust.

Tax Consult

Tax Consult has developed significantly since its creation and continues to grow.  In this context, also considering your expectations and our operational needs, we are pleased to announce the formation by Tax Consult SA of two subsidiaries:

Tax Consult Accountancy & Advisory srl (TC A & A)

&

Tax Consult HR Tax & International Mobility srl (TC HR Tax & IM)

This reorganisation is a major step in our development and will enable us to consolidate our position as an independent player in tax and accounting advice.

Since May 1, 2019, the new Code of Companies and Associations (CCA) has been in force. For existing companies and associations, the law provides for a transitional period until 01/01/2024, unless they have opted to amend their bylaws before that date.

However, from 1^st January 2020, a few mandatory measures of the CCA will automatically apply to all companies and associations, even if their bylaws have not yet been adapted to the new CCA. Any statutory clause in conflict with these mandatory requirements shall be considered unwritten from that date.

One of these measures concerns the new designations of the companies.

For existing companies, the following new designations and abbreviations will be applicable as from 1 January 2020:

• the “limited partnership”, abbreviated as “SCS” becomes the “limited partnership”, abbreviated as “SComm”
• the “private limited liability company” in short “SPRL”, becomes the “limited liability company” in short “SRL”
• The “cooperative limited liability company”, abbreviated as “SCRL”, becomes the “cooperative company”, abbreviated as “SC”
• The abbreviation of the general partnership becomes “SNC” instead of S.N.C.

Since all documents issued by the company must contain in particular the exact legal form of the company, existing companies must ensure that, as from 1 January 2020, their websites, letterheads and invoices mention the new name/abbreviation of their corporate form.

With regard to directors, as of January 1^st 2020, one of the changes mentioned in the CCA, provides that directors, members of the Board of Directors and the Supervisory Board, may no longer exercise their mandate under an employment contract.

In addition, a director may no longer combine his or her mandate as a physical person with a mandate as a representative of a company.

Finally, the distribution of profits in an SRL can only be made after a double test, namely a net asset test and a liquidity test.

If you need more information about these new measures, please do not hesitate to contact us.

Dear client,

Your personal income tax return for your 2018 revenues must be received by the Belgian Tax Authorities at the latest on the 11^th of July if you fill it out electronically on your own and at the latest on the 24^th of October if we fill your tax return out electronically on your behalf.

This year again, various legislative changes have been introduced impacting the personal income tax return. Therefore, we would be pleased if you could closely go through and fill out the most complete way our questionnaire and return it with all useful and supporting documents to the person in charge of your file before June 15^th, 2019 at the latest.

Do not hesitate to indicate us in one or the other section of the questionnaire “unchanged compared to last year” if there are no changes to report.

In addition, the person in charge of your file will get back to you personally in the coming weeks in order to further discuss your income tax return with you; to assist you with the completion of the questionnaire if desired and to answer all your questions (if any).

If by chance you already provided us with your documents, we thank you for still completing the attached questionnaire so that we can ensure that the information in our file is complete and accurate.

We thank you in advance for your attention.

Yours faithfully

Tax Consult Corporate Team