International Tax Monitor: Belgian Tax Base Plan to Affect Financial, Industrial Companies

03/08/2017 | Tax | Michel Maus
Belgian lawmakers’ plan to limit the amount of tax breaks companies can claim in one financial year will impact industrial and financial services companies that have accumulated substantial tax losses, as well corporations that set up shop in Belgium for tax optimization reasons.

Michel Maus, tax lawyer at Bloom Law Firm, told Bloomberg BNA that the government's plan would likely deter some companies from setting up shop in Belgium and prompt others to close shop.

“It will no longer be possible for companies to completely milk the cow and use all sorts of techniques” to achieve minimum taxation, he said in a Aug. 1 phone interview. Companies that come to Belgium purely to achieve maximum tax optimization will no longer be able to fully erode their taxable basis under the new measure, he said. “I think we will stop encountering those in Belgium.”

Maus said the new measure was a “follow-up story” of sorts to a fairness tax introduced under the previous cabinet, a 5.15 percent tax on certain dividend distributions that the highest adviser to the European Court of Justice found incompatible with EU law in November 2016.

The new measure, according to Maus, will result in more tax justice. “It will ensure that all companies, or at least the larger companies, will at least pay a minimum amount in taxes,” he said.

By Linda A. Thompson