Every economy needs knowledge and innovation to survive, and in that respect researchers are of the foremost importance. Belgium does not have a good record in keeping researchers and research. With effect of 1 October 2005, Belgium has extended a special tax regime for employers of researchers to include partnerships between private-sector enterprises and universities and scientific institutions.
This measure is an extension of a measure that was initially introduced in 2002 to encourage the employment of assistant researchers by Belgian colleges and universities as well as for postdoctoral researchers paid by the National Fund for Scientific Research or the Fund for Scientific Research - Flanders.
The employer withholds the full tax at source on the remuneration they pay to their researchers, but they only pay some 35 percent of that withholding tax on remuneration to the tax authorities. The law does not prescribe how the employer has to use the rest (e.g. for additional research equipment or to pay higher salaries). Some 6.864 researchers are concerned by the measure.
A year later, that tax regime was extended to include assistant and postdoctoral researchers paid by a limited list of scientific institutions in the public sector and by collective research centers and international research institutions (for prior coverage see doc. 2004-12042). That was the first attempt to include partnerships between private-sector enterprises and universities and scientific institutions in the special withholding tax exemption. This relates to some 2,071 researchers.
Although the benefit for this second category of employers is limited to 50 percent of the withholding tax, it still means a saving of about 10 percent or between € 8.000 and 10.000 per year, which makes the cost of research comparable with the neighboring countries.
On 1 October this measure has been extended to enterprises in the private sector that are in a partnership with a college or a university (within the European Economic Area) or a recognized scientific institution. The exemption of the obligation to pay the full withholding tax can also be granted for researchers engaged in a particular project. It is then limited to the duration of the project. The Belgian authorities estimate that this measure concerns some 3,500 researchers and it has budgeted some €30 million per year.
In his October 11 State of the Union address Prime Minister Guy Verhofstadt announced that some €10 million were reserved for a similar measure in favour of young innovative companies. (Read the Article)
In his October 11 State of the Union address in the Chamber of Deputies, the lower house of the Parliament, Prime Minister Guy Verhofstadt presented the policy statement of his federal government to Parliament. This policy document and the 2006 budget had been officially agreed by his Cabinet after the three regional governments agreed to contribute EUR 250 million to the federal treasury.
In his policy statement the Prime Minister stated that he goal of his government is to safeguard our prosperity for the future. The means to do this is a cautious, but resolute reform. He stressed that there were two challenges facing the country: globalisation and the aging population.
Verhofstadt said that the higher life expectancy means that by 2015, one in five Belgians will be older than 65 years of age. Fewer workers will be paying the social security provisions of a larger group of retired people. This requires a new approach to boost employment (30,000 new jobs by the end of 2006 and 115,000 jobs by 2007. The federal government has agreed on a solidarity agreement between the generations. This will include measures aimed at reforming social security, retirement and employment.
In particular, the age at which workers may take early retirement will be raised from 58 to 60, starting in 2008. In addition, early retirement will only be available after 30 years of employment, to be set at 35 years in 2012. And to export products rather than jobs, the Prime Minister announced that the tax on labour will be reduced by â‚¬ 9 million.
The government wants to modify the system of financing the social security security system that weighs less on the employment cost. Instead, 15 percent of the proceeds of the withholding tax on investment income and 30 percent of the taxes on products that harm health (such as tobacco) will be directed to the social security system.
The Prime Minister continues to reduce the national debt and targeted tax reductions will remain a government priority. He said Belgium was performing better than the eurozone average and forecast Belgian economic growth of 2.3 percent this year.
The most important new fiscal measures are described in this article (Read the article …)
Belgian savings accounts have always been very popular. Saving accounts may not be very lucrative, they are risk-free and you can always take out your money. Another attraction they have is that they benefit from a tax exemption. And that is an advantage they have over other fixed interest investments. (More …)
During a meeting of the EU finance ministers the weekend of 10 September in Manchester, England, Belgian Finance Minister Didier Reynders and his French counterpart, Thierry Breton, agreed to examine whether to revise the current income tax treaty between the two countries. Read more .
Belgian Finance Minister Didier Reynders has announced his intention to abandon a three-year holding condition for the new tax deduction for risk capital that is scheduled to take effect on 1 January 2006. (Read the article …)