Because of its position on bank secrecy rules, Belgium found itself on the OECD gray list of tax havens in 2009. Finance Minister Didier Reynders announced that Belgium would raise the level of information exchange and that his department would start negotiations with its foreign counterparts. At the same time, he announced that Belgium would opt for exchange of information under the EU savings directive.
Belgium’s Ministry of Finance started accelerated negotiations with more than 80 states to sign new income tax treaties, protocols, or tax information exchange agreements that contain a provision for exchange of information that complies with the international standard of article 26 of the OECD model tax treaty. By July 2009 Belgium had reached the threshold of 12 TIEAs required and was promoted to the OECD’s white list. In total Belgium has signed 52 treaties and protocols.
However, none of these treaties and protocols has entered into force even though quite a few have been approved by the Belgian Parliament. In fact the entire treaty ratification process came to a halt in 2010 after the Council of State5 commented on the bills for the ratification of these agreements and pointed out that these income tax treaties were ‘‘mixed’’ treaties. (read the full article).
Barely three weeks after Prime Minister Elio Di Rupo was sworn in, the Belgian Parliament on December 28 adopted two bills implementing some of the tax measures announced in the 2012 budget. The bills were signed into law by King Albert II and published in the Belgian State Gazette on December 30.
On January 26 the government submitted a new bill to Parliament that would introduce some of the remaining tax measures and correct some provisions in the 2011 laws. (read the full article).
Belgian Socialist Party leader Elio Di Rupo, who is in charge of forming a new government, announced on November 27 that he has clinched the 2012 budget. There is no way back. On November 25 Standard & Poor’s downgraded Belgium’s credit rating from AA+ to a mere AA. This could lead to higher interest rates and a downward financial spiral.
Belgium has been without a government for more than 535 days, and Prime Minister Yves Leterme’s caretaker government has been looking after the shop. In June King Albert II put Di Rupo in charge of forming a government. On October 11 Di Rupo presented the so-called ‘‘Butterfly Agreement,’’ which details the rules that will redefine the shape of the Belgian state and the balance of powers between the federal and regional governments, as well as the new mechanisms for financing the federal and regional governments. The agreement also will enact a limited transfer of taxing powers to the regional governments.
The last obstacle Di Rupo faced was an agreement by all future government parties on the 2012 budget. Di Rupo favored more taxes while the conservative parties wanted structural reforms in the job market and the pension system. (read the full article).
The Belgian State Gazette on November 10 published the law of November 7, 2011, which updates rules relating to the taxation of capital gains on fixed assets, bank secrecy, and wage withholding tax (read the full article).
One reason for Belgium’s popularity in international tax-planning structures is the absence of capital gains tax for individuals. Belgium does not have a wealth tax, either, so that makes the country attractive for wealthy individuals.
The financial newspaper De Tijd reported on June 8 that the Supreme Court of Justice had dealt a serious blow to the tax-exempt regime of capital gains realized by an individual on his shares of a company. This gives us an opportunity to review the current rules regarding Belgium’s capital gains tax regime. (read the full article).