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Belgian Govt Unveils 2010 Budget

by Ulrika Lomas, Tax-News.com, Brussels

15 October 2009

In a recent announcement, the Belgian government has unveiled key details of its 2010 budget, containing both a series of new tax initiatives, as well as provisions extending certain stimulus measures already in application.

Endeavouring to find a delicate balance between maintaining support for the country’s economy, while at the same time retaining careful control of the budgetary situation, the government has categorically ruled out any increase in the existing tax burden on employment, and has also attempted to maintain the purchasing power of individuals at the same level.

Specifically designed to support employment, key measures highlighted in the budget affecting value added tax (VAT) include the following:

  • From January 1, 2010, the government has decided to reduce to 12% the rate of VAT within the catering industry. In return, the government is requiring a commitment from employers regarding employment. After one year, the government intends to re-evaluate the measure, with a view to then reducing the rate yet further to a possible 6%.
  • The reduced 6% VAT rate, already in application in the construction industry, will be extended until March 31, 2010. The reduced VAT rate will apply to all work for which an application has been submitted before this date.

Other tax initiatives included in the Belgian government’s 2010 budget include the following:

  • Determined to support the agricultural sector, and in particular the milk industry, the government has announced its commitment to granting around EUR20m to the sectors in the form of tax reductions.
  • The government will increase the amount of tax-deductible childcare costs for severely handicapped children.
  • The government has decided to raise duties on diesel, a measure which is thought will generate in the region of EUR140m.

Belgium’s Employment Minister, Joëlle Milquet, welcomed the proposals, highlighting in particular the importance of the government’s decision to reduce VAT in the catering and construction industries.

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