Belgium avoids VAT rise with ‘Fairness Tax’
As part of Belgium’s attempts to fill the 2014 Budget gap, and meet the Euro-currency 3% deficit target, it has decide to avoid a Belgian Value Added Tax rise.
However, it has now announced a novel new tax on holding companies which issue dividends. The new ‘Fairness Tax’ will be charged at 5% of dividends paid out. It is in effect a type of withholding tax – although it cannot be offset against other income tax charges on the dividend income. Income from patents will be excluded.
This move still leaves Belgium short by €1 billion for the 2014 budget.