The reason behind it was to fight against the unfair competition created in the industry. Even though it is a common practice in many countries, it has been reported that many Airbnb homes in Brussels do not respect it still.

The Region of Brussels has tried to enforce this city tax with the Airbnb but the case now is being taken care of by the Constitutional Court.

The General Secretary of the Brussels Hotels Associations, Rodolphe Van Weyenbergh stated: « They do not register with the authorities and escape a series of rules, including this tax ».

The post Airbnb fails to follow rules of Brussels city tax authorities appeared first on Brussels Express.

Many of us would like to travel in an environmentally-responsible way, but carbon-guzzling flights often seem both faster and cheaper than greener options. With children protesting for action on the environment, it’s time for tough questions. How can aviation possibly be this cheap, what is it really costing us and are we subsidising a climate apocalypse?

If you’re looking to book a trip, there are almost too many flight price comparison websites to choose from, all claiming to help you find the cheapest air tickets. But what about a comparison revealing the true cost of your journey? Research undertaken by the German broadcaster Deutsch Welle (DW) does just that, analysing face-value ticket prices on six direct European routes, then costing in other factors.

On half the routes they compared, the plane was cheaper than the train in sheer monetary terms. Next, they factored in time. Yes, the flights were all shorter, by two and a half to six and a half hours, but hang on, not so fast. DW then added (a perhaps slightly exaggerated) three hours to flight times, to account for travel to and from airports, going through security, plus gate and runway waiting time.

Once carbon emissions are also considered, the true cost of plane travel really begins to become clear. Using figures from the Institute for Energy and Environmental Research (IFEU), DW calculated CO2 emissions for their selected journeys. Train journey emissions were then compared to this by examining how various countries produce their electricity and their mix of coal, gas, oil, and renewables.

Take-off and landing burn the most fuel, so short-haul flights use more fuel per kilometre than long-distances. After taking all that into account, it’s no surprise to discover that every single train trip on DW’s list was lower in overall ‘costs’ than the plane. Didn’t we already know that, in our hearts? Would knowing this change your behaviour? 

As we stare climate catastrophe in the face, is it right to leave individual consumers to make their own emissions choices? With our own busy lives to navigate, how are we supposed to weigh up what uses of carbon are ‘worth it’? Did you know, for example, that a single Boeing 747’s full tank of 200,000 litres of kerosene could heat 440 houses (of around 300 sq metres) continuously for two winter months. Interesting maybe, but instead of desperate analogies, we need an internationally-agreed method for calculating the social cost, or ‘shadow price’ of carbon (SCC). One way to do it, in our cash-obsessed world, is to assign a monetary value to the damage done by emitting a set amount of carbon. For example, the US Environmental Protection Agency calculates the social cost of carbon at $42 per metric tonne. Other analysts think that estimate is far too low. Much is at stake: this figure could influence how much future taxes on air travel should be.

 However, using taxes to disincentivise air travel seems very far away right now. In fact, aviation fuel is untaxed. Worse still, the USA under Trump has created a boom in private jet use, by allowing both firms and individuals to offset 100% of the cost of a new or used private jet against federal taxes. Meanwhile, in Europe, businesses and private citizens can dodge value-added tax on imported private jets by channelling purchases via the Isle of Man. This has slashed tax bills by $1bn on a minimum of 200 aircraft since 2011.

A half-full private jet is twelve times dirtier than economy air travel. Looking at this, it’s easy to become disheartened or cynical: if billionaires won’t pay the price for their environmental delinquency, why should ‘us ordinary folk’ be expected to give up our package holidays to Greece? But before you use your high horse to ride away from your environmental responsibilities, remember: it’s estimated that less than five percent of the world’s population has ever flown on a plane, so check your privilege, as the saying goes.

The shocking truth is that questionable taxation is just the tip of the iceberg when it comes to our governments’ attitude to the aviation industry. A 2017 review of Subsidies in Aviation authored by Prof. Stefan Gössling, Frank Fichert, and Peter Forsyth, finds that ‘significant subsidies are extended to manufacturers, infrastructure providers and airlines.’ Why? And what form do these subsidies take?

Aviation first began receiving subsidies as an emerging industry and in the name of defence, and the practice hasn’t ceased today, even though by the 1950s air travel could hardly be described as a new phenomenon. These days the main explanation for handouts is that aviation is a source of economic growth and high-tech employment, with the Air Transport and Action Group estimating the sector supports 65.5 million jobs and $2.7 trillion in global economic activity. But doubt is cast on these claims by double counting practices, inappropriate multipliers and the complexity of assessing direct, indirect and induced employment.

What we do know is that hundreds of billions of US$ have been paid to manufacturers, infrastructure providers and airlines globally since the 1950s and annual subsidies remain substantial today, even though many are considered ‘harmful’ by the OECD.

 Examples of subsidies identified in Gössling’s study include research and development grants, export easers, loss coverage, equity infusions, loans and loan guarantees, reduced infrastructure fees, monopoly rights and zero or reduced taxes. Information about this funding is rarely in the public domain, and often only comes to light because of cases brought to dispute resolution bodies.

Never fear though, there’s a wealth of these ‘cases’ to draw from because the ethics of aviation subsidies are in constant dispute. To cite just a few, a five-year clash between Brazil and Canada took place between 1996 and 2001 over export-financing for regional aircraft, leading to three cases at the World Trade Organisation. The European Airbus programme created controversy between the USA and Europe, with tit-for-tat accusations of illegal state aid. And the industry is touted to receive yet more state aid as Russia and China seek to re-establish commercial aircraft manufacturing.

How can we justify allowing these practices to continue? Unless you’re a climate change denier, it’s hard not to see such subsidies as an unacceptable use of public funds: governments across the world are effectively financing a future climate apocalypse. A new look at aviation is urgently needed, before we really do need someone to fly us to the moon – or further.

The post Fly me to the moon: Are we subsidising a climate apocalypse? appeared first on Brussels Express.

The event, which took place at BnP Paribas’s headquarters, brought together numerous expats who felt they were in similar situations. They are often on business trips abroad or they have to work in two or more countries.  Several of them had also been temporarily posted from one country to another. The seminar was of special interest also to corporate representatives (HR, financial) who have responsibility over those employees who have to travel often. What does this imply?

These situations have obvious implications regarding these expat’s tax status, social security and labor law issues, as well as formalities that need to be observed in order to avoid criminal liability. Participants heard how to find the best solution for their situations by Sophie Maes, international employment lawyer at Claeys & Engels, and Marc Verbeek, tax consultant at Crowe.

Major points of discussion were social security regulations which pertain to Europe, tax considerations, European Health Insurance card, and the Limosa declaration. Mrs. Maes stated: « Nowadays, it has become very easy for employees to work internationally. However, that does not necessarily mean that no formalities must be observed. For example in case of business travel to Belgium, a Limosa declaration must be made for meetings exceeding 20 consecutive days per meeting or 60 days in total per calendar year. Heavy criminal penalties may be imposed to both the foreign employer and the Belgian end-user in case of non-compliance. »

Considering that Belgian social security is the second highest in Europe — second only to France’s —  it is only understandable that expats try to find legal ways around it.

The overflow of commuters in Belgium made commuter agreements another major point in the discussions. Mrs. Maes discussed employment law considerations to consider in case you are working under a company in a foreign country, but you have a contract with a company back home. Sophie Maes added: « Expats often have commuter arrangements according to which they e.g. work 2 days from home abroad and 3 days in Belgium. However, organisations should be aware that such arrangements may also have an impact on applicable social security and employment laws. For example, in case employees work in 2 or more countries, they are subject to social security in their residence state if they work at least 25 % in their residence state. »

In addition to getting tips on international tax, social security and labor law issues, participants got to network with peers and exchange ideas over a glass of wine during the light reception.

The event was sponsored by BnP Paribas Fortis, Claeys & Engels, and Crowe.

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Are you or your employees:

• Frequently on foreign business trips?
• Working simultaneously in two or more countries?
• Being temporary posted from one country to another?

Employees are becoming increasingly more mobile internationally.

Then you will most likely be facing tax, social security and labour law issues. Also formalities need to be observed which may lead to criminal liability in case of non-compliance.

During this seminar we will explain the possible pitfalls and opportunities.

The post Are you or your employees working in different countries? This is what you need to know appeared first on Brussels Express.

A service provided by the Federal Public Service Finance is available in the City of Brussels. Head on down with your ID card to the Palais du Midi from May 22 to June 28, in May and June at the FPS Finance Tower. Help is provided by an agent to fill in your tax return.

A new scheme was launched where a large number of pensioners, the unemployed or people on sickness or disability benefits will no longer receive tax returns but have a simplified declaration.

That declaration contains information which the administration already has on you and is used to calculate the taxes. If you agree with the proposal, you don’t need to fill any document; just wait and you will receive the amount or be charged.

Good to know:

• Tax-on-web allows to fill in the form online and offers many advantages such as direct aid for the hand-written part and an estimated amount of your taxes. If you wish to make changes, then you should write to your tax service or make changes via Tax-on-web.

The post Do you need help to complete your tax return? appeared first on Brussels Express.

The impact of the reform will impact all taxpayers – from individual taxpayers to large multinational companies. The plan set out by the Government is indeed very broad, and below we would like to highlight a few key items that can impact companies investing in Belgium.

Note that at the time these lines are written, no (draft) law has yet been published, and our below comments are based on a preliminary understanding of the measures. Enacted measures may thus be different.

The reduction of the corporate tax rate and the limitation of the use of the tax attributes

The measures which received the most attention are the progressive reduction of the corporate income tax rate to 25% by 2020, and the limitation of the use of the tax attributes.

The gradual rate reduction – and elimination of the crisis surtax  – will resolutely change the corporate tax landscape in Belgium as from 2018. The changes can be summarized as below.

Note that the SME tax rate will also be reduced as from 2018 to 20% (though the crisis surtax will be reduced at same rhythm as above) on the first EUR100,000 of taxable basis.

The Government also announced a limitation of the use of carried-forward deductions, which could lead to a minimum tax basis. Based on the Government’s plan, carried forward deductions, such as tax losses, carried-forward dividend received deduction, carried-forward innovation deduction, carried-forward notional interest deduction will be limited to EUR1m, and then to 70% of the taxable profit in excess of EUR1m. Thus even a company carrying previous years’ tax attributes could face a tax bill.

There will be however no limitation to current year’s deductions, the carry forward investment deduction and the carry forward tax credit.

Improvement of the holding regime with a 100% exemption on qualifying dividends and capital gains

The Government proposes a 100% deduction of the amount of qualifying dividends received. Currently, Belgium’s dividend received deduction regime is limited to 95% of the amount of qualifying dividends received.

As from 2018, Belgium will (re)introduce a full exemption of capital gains on shares. Currently, realised capital gains on shares held for more than a year (where the subject-to-tax condition is met) are subject to a 0.412% taxation. This 0.412% taxation will be abolished for gains on shares held for more than one year where the subject-to-tax condition is met and the participation is of at least 10% or an investment value of EUR 2.5m – aligning the capital gain regime further on the dividend received deduction regime.

The changes to the capital gains regime can be summarized in the following table:

Reform of the notional interest deduction

The notional interest deduction regime will also be amended. The notional interest deduction regime allows for an off-balance deduction, calculated on the adjusted own equity of Belgian companies and branches, based on the average rate of the 10-year Belgian bond  during the months of July, August and September of the penultimate year preceding the assessment year. For financial year 2017, this rate was of 0.237%.

As from 2018, the NID will be calculated on one fifth of the positive difference between the equity at the end of the current accounting year (“X”) and the equity at the end of accounting year  five years earlier (“X-5”).It is not expected that the rest of the methodology to calculate the “NID rate” will change.

The changes to the regime reduce significantly the benefit of the regime.

Further compliance focus

In order to finance the corporate tax reform – and increase tax compliance, the Belgian Government has proposed a series of amendments which could have significant impact on taxpayers’ filing position and attitude towards the Belgian tax authorities.

• It is proposed that tax adjustments made during tax audits where a 10% penalty or more is effectively applied will constitute a minimal taxable basis for the taxpayer – no tax deduction could be offset against these (with the sole exception of current year dividend received deduction). This could potentially lead companies with losses to a cash-tax payment to be made, and will require companies with available tax attributes to consider their filing positions.
• The rate for insufficient tax prepayments will increase (in 2018 to 6.75%, from 2.25%).
• Where no corporate tax return is filed, the lump sum taxable basis will gradually increase as from 2018, leading to corporate tax due of EUR 10k.

Matching principle

As from 2018, deduction of costs in a current year whereas they belong as in reality to the following year, will be restricted – tax law will introduce the “matching principle” – and income of a following year will only be tax deductible in that year.

Provisions

As from 2018, provisions for liabilities and charges will only be tax exempt insofar they relate to contractual, legal or regulatory obligations existing at the end of the financial year.

Bearing in mind the decrease in tax rate, the Belgian Government intends to implement an anti-abuse measure – following which upon reversal, provisions will be taxed at the rate applicable at the moment they were recorded.

Tax neutral reorganizations

In line with the limitation of carried forward tax losses in the context of tax neutral reorganizations (such as mergers), any carried forward participation exemption will similarly be limited.

Anti-Tax Avoidance Directive

The EU “Anti-Tax Avoidance Directive” (so-called “ATAD”), aiming to implement across Europe the OECD and G20 recommendations on neutralizing base erosion and profit shifting (“BEPS”), will be transposed in Belgium at the occasion of the tax reform.

At this stage, little detail has been released on these very technical measures – and final legislative texts will need to be reviewed in order to be able to measure precise impact on a taxpayer’s effective tax rate.

These measures include, entering into force as from 2020:

• An interest limitation rule – limiting deduction of net interest payments above a threshold of EUR 3,000,000 to up to 30% of the EBITDA (earnings before interest, tax, depreciation and amortization). This EUR 3,000,000 is to be reviewed at a (Belgian) group level, and there will be a Public Benefit Infrastructure exemption. Disallowed interest can be carried forward;
• A “controlled foreign company” legislation will be introducing – leading to  potential immediate taxation of income of subsidiaries in “low-tax” jurisdictions;
• As from 2020, the exit taxation regime will be extended in line with the Directive, and step-up will also be granted in case of transfer outside of the EU;
• The “anti-hybrid” rules as set out by the Directive are also set to be implemented in Belgium.

Tax consolidation

A tax consolidation mechanism will be introduced in Belgian tax law as from 2020. This mechanism would allow companies to make use of losses incurred by other Belgian group companies or the Belgian permanent establishment of a foreign company (under conditions), against a payment equal to the amount of tax that would have been due without this intragroup loss transfer. The regime will however not allow multiple taxpayer to be seen as one single taxpayer for tax purposes.

Historic losses incurred before 2020 will be excluded.

Disallowed expenses

The disallowed expenses regime will be further amended as from 2020, including:

• Adjustments to the company car regime, further restricting the deduction of car (and car related) expenses;
• All fines relating to direct and indirect taxes will be fully disallowed;
• The secret commissions tax will be fully disallowed and the secret commission tax rate of 50% will be abolished.

Other compensation measures as from 2020

• Limitation of losses incurred in foreign permanent establishments

Currently, losses of foreign establishments can be offset against profit of the Belgian head-office. The Government envisages to limit this – and losses of foreign PEs will only be deductible in Belgium if the losses are no longer deductible in the foreign jurisdiction. The likely outcome of this change will be that in most situations losses incurred in PEs will no longer be available in Belgium.

• Extension of the scope of the PE definition

In line with the OECD developments, the definition of PE will be broadened and aligned on the BEPS recommendations.

• Interest on “current account” positions

The reference to the market interest rate will be replaced by a reference rate based on a rate published by the Belgian national bank, increased with 2,5%, as maximum interest on debt positions without term. It is expected that an exception will be included for framework agreements for cash pooling.

Take away

The Belgian tax reform – which still needs to be translated in text of Law – will have a sweeping impact on the tax positions of multinational companies operating in Belgium.

While, the Government has presented a very significant reduction of the corporate tax rate, and further improvements to the holding companies regime, series of restrictions will also be introduced – and some of them could have a significant impact on multinational entities (CFC, interest restriction, anti-hybrids).

The reform is a step in the good direction to bring the Belgian tax rate at a more competitive level. Though a reduction to 25% still leaves Belgium in the “higher range” of European average corporate tax rates, more importance should be given to the effective tax rate. For example, this reduced rate, combined with the innovation deduction regime (which remains unchanged), will allow companies to benefit of an effective rate of 3.75% on qualifying innovative income (such as income from patents, copyrighted software, …), whereas neighbouring countries have begun increasing their tax rates on these.

The post The Belgian tax reform appeared first on Brussels Express.

I have recently applied to have the “indépendant” status, and it was surprisingly easy to create my own individual enterprise. You will simply need to choose a social security fund, open a dedicated business bank account, register your company at the Company bank, get a VAT number and sign up for a to a “mutuelle”. Thankfully you can do most of these in the same place.

You can start by choosing a social security fund. The S group has a useful comparative table here. They will take a share of your contribution, but at the end of the day the difference is small – up to 3.65 EUR per month for a 50,000 EUR gross income. I would recommend to shop around and pick the one you like best. I chose one that responded the fastest to my queries. One of them took over 1 week to reply to a meeting request and gave me 3 phone numbers that did not work. In one meeting with your social security fund you should be able to affiliate yourself to it, register as a company and get your VAT number for a cost of around 160 EUR (deductible).

You will also probably need to get an accountant unless you are familiar with filing taxes. The cost will depend on the complexity of your company and will cost at least 600 EUR per year, but probably more. Registering your company is the easy bit. In fact Belgium ranks 16^th in the world for opening a company in the Ease of Doing Business index, but only 59^th in the ease of paying taxes.  You will probably need some advice on what costs are deductible and how to deduct them.

One of the choices you will be confronted with is to create an individual or regular enterprise. The individual enterprise is easier to set up but the regular enterprise could be more advantageous fiscally, especially if you have to directly employ other people. An accountant can advise you in your choice.

For some self-employed people these solutions will be too expensive or complicated. There is a solution to that called the Société Mutuelle des Artistes (SMart), launched in Belgium in 1998 and now active in France, Spain, Sweden, Italy, The Netherlands, Germany, Austria and Hungary. Originally devised for artists, it is now open to any freelance professional that does not wish to be burdened by administration procedures. Their fee is around 6%.

If becoming self-employed is an attractive prospect for you, carefully consider the difference between being an employee and being self-employed. You can find a comparative table here. Basically, you have more freedom, but less rights: no unemployment benefits (unless you already had unemployment benefits before becoming “indépendant”), limited sickness and disability benefits and reduced maternity leave.

There are also different types of support to launch your own business, make sure to take full advantage of the potential benefits offered. Some useful places to get more information are: National Institute for the Social Security of the Self-employed (NISSE), Actiris, Brussels Economy and Employment and the Brussels Region website, as well as the websites of the different social security funds.

The post Being self-employed or a freelancer in Belgium appeared first on Brussels Express.

« That is exactly the point of the Expat Financial Affairs », confirmed the chief executive of the British Chamber of Commerce Glenn Vaughan, « we noticed that the same questions kept coming up on topics like pensions and taxes from the staff of our member companies. And we realised that we had the answers to those same questions from other members, so we decided to seize the opportunity ».

That is how the Expats Financial Affairs started, with its first edition in 2014: the organizers (the British Chamber of Commerce, BNP Paribas Fortis and the Fry Group) perceived immediately the importance of offering a complete and exhaustive set of information to the expats in Belgium with an expats perspective. The people at the event are all expats who already went through the process of settling down and dealing with the Belgian financial procedures. Therefore, they can offer the most precise, direct and practical solutions to those who are planning their life in Belgium.

Salvatore Orlando, Head of Expatriates at BNP Paribas Fortis, noted that “The added value of the event is its original concept and its multifaceted approach: at the same time, it offers a fair, a networking platform and practical workshops. It gives a unique and direct connection with stakeholders, partners and companies, who can engage in a one-to-one conversation and satisfy all the curiosities, doubts or questions of the visitors”.

In fact, the access granted to the expertise is unique and innovative: the different experts are gathered in one place and at the same time, which makes research and confrontation easier and faster. It also presents practical solutions in a concrete and articulated context, offering a 360 degrees approach to the different dimensions of the topic.

The event is at its fourth edition and has developed quickly in the last years, slowly becoming a “must” event. It gathered more and more business partners -present at the event with stands- and it spread also outside of Brussels, as for example in Ghent. The Expats Financial Affairs pays a great attention to the past editions and to the feedbacks gathered in those occasions: it has, in fact, improved and developed greatly two workshops, accommodating the topics to the curiosity and questions of the public, and making them more dynamic and modern. For instance, the workshop on start-ups has been oriented more towards creating one’s personal and innovative start-up, while the workshop on real estate in Belgium now focuses more on how to find the capital to invest in property.

The event is not just a good occasion for collecting some useful information on taxes and pensions, but it is also a nice opportunity to meet with other expats, enhancing one’s connections. It is a welcoming, inclusive and open platform through which expats can help each other, understanding the new society they live in and finding their own space in it.

The post Expats Financial Affairs: an inclusive event appeared first on Brussels Express.

If you are an expat, you just moved to Brussels and you are wondering how to address the above-mentioned issues, you should take a look at the Expat Financial Affair event, organized by the British Chamber of Commerce and BNP Paribas Fortis in Belgium on the 10^th of October. The organization is a non-profit institution which aim is to work as an international network and business facilitator in Europe. It wants to support people’s business and goals, in particular, facilitating the engagement with European Union and Regulatory issues; supporting business development; supporting International Trade and Investment; providing British Chamber Business Services and hosting Brussels New Generation – the network for young professionals in Brussels.

The event offers basic -although essential- advice in English on how to take care of your finances as an expat in Belgium. It will give the participants the opportunity of meeting with expert partners and fellow expats, to share opinions and experiences and to receive a proper welcome and introduction to life in Brussels.

The Expat Financial Affairs will host informative and interactive presentations, an exhibition fair and a networking event over food and drinks. The sessions will explore the topics of trends and taxes in the Belgian housing market; expats cross-borders relationships in Belgium; financing a future residence; how to successfully start a start-up; how to calculate retirement and, last but not least, it will offer general information on pension. For instance, if you are interested in developing successfully your own start-up, check the related workshop and discover more on how to find an active partner, a community, a knowledge center, a facilitator and a connector, indispensable elements to achieve your objective. The talk will explain how to use innovation hubs and how to expand your network, find the financing resources and contacts you need to succeed.

It will be a great opportunity to find easily and practically your way around in the Belgian burocracy and in the financial world, meeting new people and sharing your experiences!

The post Expats financial affairs: how to settle down in Brussels appeared first on Brussels Express.

No tax relief came this year for workers and employers in Belgium, where the Tax Liberation Day for workers is again July 27th – the second latest date in the EU-28, with France (July 29th) also unchanged from last year.

Key findings – Belgium 

• Belgians are second-most expensive employees to hire in the EU, but rank 10th in net income.
• The Belgian government takes more than any other EU country from a typical employee’s salary (33 916€).
• Belgium is now the country that taxes labour at the second-highest rate in the European Union; an employer in Belgium spends 2.15€ for a typical worker to net 1€ after taxes.
• A Belgian employee’s “real tax rate” (including VAT) is now 56.7%, compared to an EU average of 44.8%.

“It was encouraging to hear Kris Peeters confirm that a ‘third wave’ of the ‘tax shift’ will lead to higher net pay for workers and lower costs for employers starting in 2018. For this year, there is no change: Belgians are still working five weeks longer than Swedes to pay their taxes. Nevertheless, they should be optimistic for next year.”  explained James Rogers, researcher from the Institut Économique Molnari and co-author of this study.

On Belgium, Cécile Phillipe, researcher from the Institut Économique Molnari and co-author of this study, underlined that “much still needs to be done in Belgium, but the current government has demonstrated its capacity to reverse the trend of the average Belgian employee. France is now last in our study. It is now its turn to show its capacity to reform when the cost/quality ratio of French public expenditures is poor in comparison with other countries that have a similar social tradition.” 

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