How you can use a marriage contracts to change the inheritance rules. (More …)
The Antwerp public prosecutor’s office on October 19 announced that it has started an investigation into a “cash company” tax avoidance scheme allegedly set up by the owner of Belgian electrical retailer Hugo Van Praag to avoid the payment of € 10.41 million in corporate income taxes.
A cash company construction involves a cash-rich company that has successfully sold its assets, but has acquired a considerable capital gains tax liability. Under Belgian law, CGT is part of the corporate income tax. (The tax rate recently was reduced to 33.99 percent, from 40.17 percent.) If the company reinvests the proceeds from the sale of its assets in other, qualifying assets, rollover relief is available for capital gains on the fixed tangible (and some intangible) assets that the company held for at least five years before the disposal.
Cash company constructions can be doubly attractive for companies with large taxable profits and few possibilities to set off deductions against their profits. By selling the business assets to a second company with (almost) the same name and the same management structure, they can create new tax deductions, because the second company can depreciate the purchase price of the business assets. And if the second company finances the purchase, it can also set off the interest against its taxable profits. (Read the article …)
The Flemish Tax Authorities have seen a significant increase in gift tax collected. In the first nine months of 2004 they received some € 82,5 million, twice as much as budgeted on the basis of last year's figures. The rates have dropped significantly and Members of Parliament are beginning to wonder if they have not opened Pandora's box. (More …)
Belgian Prime Minister Guy Verhofstadt on October 12 gave his State of the Union address in the Chamber of Deputies, the lower house of the Parliament. Several new taxes to be introduced in 2005 are expected to yield substantial funds for the government coffers.
For the fifth consecutive year, the federal government has managed to balance the budget for 2005. However, a number of measures that were approved during the past few months will be postponed, resulting in a savings of € 130 million. The postponements should not endanger social measures to fight poverty or increase jobs, and an increase in pensions and benefits will proceed as planned, Verhofstadt said. The most important new fiscal measures are described in more detail in the article attached … .