Belgium published in the Official Gazette the Law of 11 February 2019 on Fiscal, Anti-abuse, Financial, and Miscellaneous Provisions. Two of the key measures of the Law, which was approved by the parliament, are the implementation of the country's 30% of EBITDA interest deduction restriction and the exchange of information with third countries.
A new interest limitation rule is introduced on the basis of article 4 of the ATAD I Directive (“30% EBITDA rule”). The limitation must be computed at the level of each taxpayer (Belgian company or PE). The exceeding borrowing costs are computed on a net basis and they take into account payments economically equivalent to interest (exact guidance still to be communicated – based on the Directive).
For each taxpayer, exceeding borrowing costs will be deductible up to the highest amount of 30% tax EBITDA or EUR 3 million (= de minimis/safe harbour rule – EUR 3 million to be allocated across Belgian group entities – exact guidance still to be communicated). Disallowed exceeding borrowing costs can be carried forward without time limit. Alternatively, the amending law provides for a transfer of “deduction capacity” to another Belgian group entity (while the current law provides for a transfer of exceeding borrowing costs). This must be analyzed in conjunction with the new consolidation regime. Disallowed exceeding borrowing costs are not part of the tax base as set in article 185bis, which means that the companies taxed on this basis (e.g. regulated investment companies or regulated real estate companies) are de facto out of scope.
The legislation clarifies that this rule applies from 1 January 2019 (originally approved from 2020).
In order for Belgium to meet its international obligations and to act in accordance with the OECD standards, the exchange of information on the “ultimate beneficial owner” register will be extended to include jurisdictions outside the EU with whom there is a legal basis for exchange of information with Belgium.
Under the new legislation, the exchange of information with third countries will be done on the basis of reciprocity, the data may be requested in accordance with Article 30 (2) and Article 31 (7) of Directive 2015/849 / EC and the request should be fulfilled within one month start from the date of the request.
Source: Belgian Government
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