martes, 13 de diciembre de 2016

Belgium presents draft bill to implement amended PSD to Parliament

The Belgian government deposited a draft law with the parliament on 27 September 2016 that would implement the amended EU parent-subsidiary directive (PSD) into domestic law and make changes to the exit tax rules to bring them in line with EU law.

Implementation of amended PSD 
The anti-hybrid rule, included in the PSD in 2014, is designed to prevent deduction/noninclusion mismatches resulting from hybrid instruments issued between related companies in EU member states, and it requires the member state of the parent company to tax payments received on hybrid instruments where the payments are deductible in the member state of the subsidiary. The general anti-avoidance rule (GAAR), added to the PSD in 2015, is designed to prevent tax avoidance by requiring member states to deny the dividend withholding tax exemption under the PSD in cases where tax avoidance is involved.
To implement the anti-hybrid rule, the “subject-to-tax” requirements of Belgium’s dividends received deduction (DRD) regime would be expanded to include a provision stipulating that the DRD would not be available to the extent the payer of the dividends could deduct or has deducted the payment in computing its taxable income.
To implement the GAAR, both the subject-to-tax requirements of the DRD regime and the provisions relating to withholding tax would be amended to deny the application of the DRD or an exemption from withholding tax for dividends that are related to a legal arrangement or series of arrangements deemed by the Belgian tax authorities (i) to be artificial (i.e. not set up for valid business reasons that reflect economic reality), and (ii) that have been put in place for the main purpose (or one of the main purposes) of obtaining the DRD/withholding tax exemption or the benefits of the PSD in another EU member state.
Based on the draft legislation, the rules would apply retroactively as follows:

  • The new DRD rules would apply to dividends distributed or attributed as from 1 January 2016. However, if the financial year of distribution or attribution was closed before the first day of the month following the date the law is published in Belgium’s official gazette, the rules would apply to dividends distributed or attributed as from the first day of the month following publication; and
  • The GAAR would apply to dividends distributed or attributed as from the first day of the month following the date the law is published in Belgium’s official gazette.

The amendments to the subject-to-tax requirements of the DRD regime and the withholding tax exemption rules would apply in Belgium with respect to dividends from both EU and non-EU payer companies.

Deferral regime for payment of exit tax
The draft law includes measures relating to Belgium’s exit tax rules (which subject companies transferring their seat or assets from Belgium to another EU member state to immediate taxation), and that respond to a formal letter issued by the European Commission in September 2014. In that letter, the commission requested that Belgium bring its exit tax legislation in line with the freedom of establishment principle in the Treaty on the Functioning of the European Union.
The draft law would retain the general rule that an immediate and final exit tax will be levied in the case of outbound reorganizations or transfers of a company’s seat if assets are not maintained in a Belgian permanent establishment.
Taxpayers would be granted an option to pay the exit tax immediately or in equal installments over a five-year period.
The option to defer the payment of the exit tax would be available only in the case of certain listed outbound reorganizations or transfers of a seat to an EU member state or a European Economic Area member state that has concluded an agreement with Belgium on mutual assistance in the recovery of taxes (currently, only Iceland and Norway have concluded such agreements). The draft legislation also specifies how the exit tax would be calculated, whether a guarantee would have to be provided and the circumstances in which the deferral regime would expire.
The exit tax rules would apply as from tax year 2017 to transactions taking place as from the date the law is published in the official gazette.

Source: Deloitte

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