Belgian officials recently expressed hope that negotiators will reach an agreement before the end of June on a new double tax treaty with France that would replace the one that dates back to 1964. Discussions started in March, but there are still some unresolved points of contention, particularly relating to the taxation of cross-border workers. (Previous negotiations were blocked by the French delegation in 1998.)
The main issue that Belgian tax authorities have put on the agenda is the abolition of a provision that states that a worker living in the border area of one country, but working across the border in the other country, is subject to tax only in his country of residence. That provision is particularly advantageous for French residents working in Belgium; on average they save about 40 percent in tax. It is estimated that there are about 25,000 French residents working in Belgium, 10 times the number of Belgian residents working across the border in France. (Read the article …)
The Act of 24 December 2002 has modified provisions of the 1999 Belgian tax regime for stock options granted under an employee stock option plan. These modifications were necessary because the new tax regime did not account for the possibility that the economic climate might deteriorate as much as it has in recent years.
Since the new tax regime was introduced by the Act of 26 March 1999, numerous stock option plans have been set up; over 60 percent of all listed Belgian companies have set up ESOPs for their employees. To minimise the income tax due, most of these plans were drafted so that the options were limited to five years and the beneficiaries would be unable to exercise their stock options before the end of the third calendar year following the year of the grant. (Read the article …)
The Brussels Court of Appeal has applied the Supreme Court case law in respect of stock options in a case relating to convertible profit shares, blocking an income tax assessment against the directors of a public limited company. (Read the article …)
Belgium has implemented the EU Council Directive on electronically supplied services, with effect from 1 July 2003.
The basic idea behind Council Directive 2002/38/EC (of 7 May 2002) is to tax radio and television broadcasting services and certain electronically supplied services provided across EU borders at the place where the recipient of the service is established and to allow the providers to register for VAT in only one member state. (Read the article …)