Coronavirus | Belgian Measures For Businesses

• Published date: 21 July 2021
• Subject Matter: Corporate/Commercial Law, Employment and HR, Tax, Coronavirus (COVID-19), Corporate and Company Law, Retirement, Superannuation & Pensions, Employee Benefits & Compensation, Income Tax, Sales Taxes: VAT, GST, Litigation, Contracts and Force Majeure
• Law Firm: Loyens & Loeff
• Author: Natalie Reypens, Bert Gevers, Kris De Schutter, Linda Brosens, Eline De Ryck, Marc Vermylen, Koen Panis and Sara De Moor

Since 3 March 2020 different authorities (EU, national, local) took measures in Belgium to reduce the spreading of the COVID-19 virus. In order to overcome the economic impact of these decisions, many compensating measures were taken.

We provide you with an overview of the most relevant actions that were taken by the competent authorities, updated on a regular basis.

1. Tax related measures

Compensation for mandatory closure of businesses

Update 28 April 2021

In order to mitigate the financial impact for these companies, the Flemish Government announced that businesses in the Flemish region can request a compensation. Businesses which were mandatorily closed entirely were initially entitled to a lump-sum compensation of '4,000 while businesses which could remain open on weekdays were entitled to a compensation of '2,000. Companies that are still required to remain closed after 4 April 2020, are entitled to an additional compensation of '160 per day. A compensation of EUR 2,000 is also foreseen for businesses that do not need to close but that can demonstrate that the turnover has decreased with at least 60% in a period of one month as of the reopening compared to a reference period last year. Funds are also made available in the Walloon and Brussels region for similar measures. The compensations granted in the framework of aid measures taken by the regions, communities, provinces and municipalities are, under certain conditions, exempt from taxes. This tax exemption applies until 31 December 2021. Compensations that were previously treated tax exempt but are reimbursed to the respective region shall not be considered a tax deductible expense.

Ruling on tax-free allowance for teleworking

Update July 2021

Due to the measures taken in the fight against the coronavirus, the Ruling Commission has been willing to provide a ruling confirming that the employer can temporarily give its employees, regardless of their job category, a tax-free allowance of up to EUR 126,94 per month to cover the costs caused by teleworking, such as heating, electricity, paper, etc.

On 14 July 2020, the Belgian tax administration issued a circular letter allowing, under certain conditions, such a tax-free allowance in case of regular and structural homeworking carried out by employees, even without a ruling. If employees work at home for at least 5 working days per month, the employer may grant a lump-sum homeworking allowance of up to EUR 126.94 per month. As a result of indexation, this amount will increase to 129.48 euros per month from 1 April 2020.

On 26 February 2021 the tax administration issued a new circular letter for employees who work at home which transcends the issue of home working in the context of the COVID-19 and which replaces the previous one. The circular letter foresees on the one hand a fixed office allowance covering various office expenses for a maximum of EUR 129.48 per month (to be increased to EUR 144.31 for the months of April up to and including September 2021) and on the other hand a reimbursement of the purchase price of office furniture/computer equipment. For more information reference can be made to our article on this subject.

Deferral of tax payments Deferral of tax payments

Updated July 2021

Federal level

At the beginning of the coronavirus in 2020, the Belgian government took various measures to defer the payment date for corporate income tax, personal income tax, legal entities tax, wage withholding taxes, VAT and certain excise duties. At present, no similar measures have been announced for 2021 yet.

Companies facing financial difficulties as a direct result of the Corona virus pandemic, regardless of their activity or sector, can however still request a number of tax and social security support measures from the Federal Tax Authorities, which should allow companies to bridge these temporary financial difficulties.

All Belgian registered businesses (both companies and self-employed individuals) are entitled to these measures if it can be shown that they have incurred nuisance from the spreading of the Corona virus and the correlating measures, which can be either direct (e.g. significant decrease in turnover) or indirect (as a consequence of a chain-reaction, e.g. partner companies suspending business). Companies which are in structural financial distress (i.e. companies already facing financial difficulties prior to the Corona outbreak in Belgium) can in principle not benefit from these measures.

The support measures consist of (i) a further deferral of payment, (ii) a waiver of late payment interest and (iii) a waiver of late payment fines. These measures can be requested for VAT, wage withholding tax, corporate income tax, personal income tax and legal entities tax. A company can request to apply (one or more of) these measures using a form specifically issued for this purpose and should submit a separate request for each individual debt. The form can be found on the website of the Federal Tax Authorities here. In principle, a request can only be lodged after the receipt of an assessment notice or a request for payment. Application of these measures has been extended to 30 June 2021.

It should be noted that these supportive measures are conditional upon the timely, correct and complete filing of the relevant tax return. Hence, it is of utmost importance that the relevant tax formalities (e.g. VAT return, income tax return) are duly and timely complied with.

On 5 July 2021, the tax administration announced that an individual repayment plan can still be requested for debts resulting from COVID-19. In this way, payments can be spread over up to 24 months and, in exceptional cases, 36 months. Large companies can even request an instalment plan of up to 50 months.

Regional level

In addition to the above, various measures are also announced at the regional levels.

The Flemish Government has for example announced that the payment of the immovable property tax (onroerende voorheffing / précompte immobilier) for 2020 is deferred for approximately four months (i.e. until 30 April 2021) for companies active in the Flemish Region. No late payment interest will be charged for that period. The deferral is granted automatically and companies may disregard the payment term of 31 December 2020 mentioned on the assessment notice. Self-employed persons can flexibly request a payment plan and, if necessary, a waiver of interest on late payments.

For some additional measures regarding the payment of inheritance and registration duties, reference is made to the section 'Filing deadlines postponed' below.

Communal level

Following the federal decisions to prevent the coronavirus, cities and municipalities also provide support measures for the self-employed and entrepreneurs affected. A compilation of a.o. the fiscal measures of the Flemish cities and municipalities can be found on the website of VVSG here. However, it is recommended to have a look at the website of your municipality.

Deferral of prepayments Deferral of prepayments

If self-employed persons and companies are in a tax paying position and do not make timely prepayments of income taxes, a tax increase will be imposed. Each quarter a prepayment can be made and each prepayment leads to a tax credit which reduces the tax increase suffered if no prepayments would have been made. A prepayment made in the first quarter results in a higher tax credit than a prepayment made in a later quarter. Many self-employed persons and companies are currently facing liquidity problems due to the corona crisis and can therefore not make prepayments. In order to avoid that they are being penalized if they only prepay the taxes later this year, the tax credits for the last two quarters of 2020 are increased.

The measure shall apply to prepayments relating to a taxable period ending between 30 September 2020 and 31 January 2021 included. For companies, the tax credit for prepayments of corporate income taxes increases in the third quarter from 6% to 6.75% and in the fourth quarter from 4.5% to 5.25%.

For the self-employed persons, the tax credit for prepayments of personal income tax increases from 2% to 2.25% in the third quarter and from 1.5% to 1.75% in the fourth quarter.

This measure does not apply to:

• companies that repurchase own shares, make a capital reduction or attribute/pay dividends between 12 March and the end of the relevant period;
• companies that pay a variable remuneration between 12 March 2020 and the end of the relevant period to the main representative of the executive directors, to the chairman of the executive board to the main representative of the other persons in charge of the management or to the main representative of the persons in charge of the daily management;
• taxpayers that hold a direct participation between 12 March 2020 and the end of the relevant period in companies that are established in certain tax haven countries;
• taxpayers that pay amounts of ' 100,000 or more between 12 March 2020 and the end of the relevant period to companies established in certain tax haven countries if it is not demonstrated that these payments were made in the context of an actual and genuine transaction

Abolition of December advance payment for VAT and wage withholding tax

Update April 2021

VAT taxable persons filing periodical VAT returns (i.e. monthly or quarterly VAT returns) are no longer required to pay the advance payment of the VAT normally due for the month December or for the last quarter in December of that year. As a result, the VAT due on the transactions carried out in December respectively Q4 of a given year shall only have to be paid to the Belgian State by the 20^th of January of the following year. The December advance payment has equally been abolished for the wage withholding tax.

Filing deadlines postponed

Federal level

Update 10 February 2021

In 2020 the Belgian tax authorities allowed various extensions for the filing deadline of income tax...