31st May 2016
Fabian Missinne, Titeca Accountancy
MSI's Belgium accounting member firm Titeca Accountancy explains the new tax shift legislation in Belgium.
The tax shift, whereby taxes are shifted from labour to consumption, was introduced to strengthen the competitiveness of Belgian companies and to increase the purchasing power of the residents. In addition, Belgium is facing the challenge to balance the budget.
Most new measures are effective since 1 January 2016.
The new measures
To achieve the objectives of enhancing the competitiveness and purchasing power, various measures were introduced. These are primarily for the benefit of start-ups and SME’s.
First, there is the general reduction in employers’ contributions. Previously this contribution amounted 32.4%. The government has decided to reduce the percentage gradually, making them already drop in 2016 by 2.4%, to 30%. As of 2018 there is a serious reduction of 5%, so that the contributions will eventually amount 25%.
Another important measure is the target reduction for first recruitments. A company that recruits a first employee receives a full exemption of employer’s contributions (currently 30%) for an indefinite period. The exemption is linked to the employer, not to the employee. This means that if the employee leaves the company, and the employer hires a new employee, he retains the full exemption. This measure is also applicable for foreign employers.
Download the full article on Tax shift in Belgium: a change in mind-set.
Titeca Accountancy is an independent accounting firm, with clients all over Belgium. Our professionals provide a broad range of accounting and tax services to all kind of companies (small/medium and large).
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