Belgian implementation of DAC6 approved at the last minute
With the Act of 20 December 2019, the Belgian legislator implemented the much-discussed DAC6 at the last minute.1 The Act will enter into force on 1 July 2020, but the obligation to declare certain cross-border tax arrangements to the Belgian tax authorities already applies to tax arrangements in which the first step has occurred/occurs between 25 June 2018 and 1 July 2020. The tax intermediary or taxpayer will have until 31 August 2020 to report the required information.
Failure to report or late reporting of a reportable tax arrangement could result in fines between EUR 5,000 and EUR 100,000.
Model ‘group contribution agreement’ finally published
On 13 February 2020, the tax administration published the long-awaited model for the group contribution agreement.2 Based on such an agreement, the losses of a tax year of one group company can be ‘transferred’ to and deducted by another group company, if certain conditions are met.
To benefit from this regime, the use of a group contribution agreement is mandatory and must be included in the corporate income tax return or non-resident tax return.
Tax administration explains calculation of ‘incremental risk capital’ after restructuring
In a recent circular letter of 29 January 2020,3 the tax administration has commented on the latest changes to the notional interest deduction. The circular letter provides clarification on both the new calculation method of the deduction, in particular regarding restructurings, and some additional anti-abuse provisions.
European Commission sets out strategy in ‘2020 Work Programme’
Also on 29 January 2020, the European Commission adopted its 2020 Work Programme. The Programme contains two tax initiatives: a Communication on Business Taxation for the 21st century and a complementary Action Plan to Fight Tax Evasion.
The Communication on Business Taxation for the 21st century will focus on taxation aspects relevant in the Single Market. With the new Action Plan on Anti-Money Laundering, the European Commission would like ‘to ensure the integrity of the European financial system, reduce the risks of instability, (…) improve the supervisory system and improve the enforcement of the rules’. The Commission’s ultimate goal is to ‘make taxation simple and easy’.
Belgian Act implementing Brexit transitional tax provisions
The Act of 3 April 2019 on the withdrawal of the United Kingdom from the European Union stipulated that the United Kingdom would still be treated as a Member State of the European Union for tax purposes until 31 December 2019. The new Act, approved in Parliament, provides for a new transitional regime until 31 December 2020. Also, it provides in some areas for a more ‘specific’ transitional regime, e.g. insurance benefits in contracts concluded on or before 31 December 2020.
Bart De Cock - Counsel (bart.decock@tiberghien.com)
Kimberly Van Sande - Associate (kimberly.vansande@tiberghien.com)
1 Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements.
2 Circulaire nr. 2020/C/29 over de aftrek van de groepsbijdrage in de vennootschapsbelasting.
3 Circulaire nr. 2020/C/22 over de aftrek voor risicokapitaal.
