Belgian Royals Face First Tax Bills

by Ulrika Lomas, Tax-News.com, Brussels

07 June 2013

Under the chairmanship of Belgian Prime Minister Elio Di Rupo, Belgium's eight party governing coalition has united on radical plans to reform the Royal Family's allowance system, and has agreed to subject royal members’ "salaries" to individual income tax (IPP).

The aim of the reform is to modernize and to increase the transparency and controls of the current regime. In accordance with the proposals, the number of royals receiving allowances is to be reduced. In addition, the allowance is to comprise in future two distinctly separate parts, namely a salary and an allowance for spending on royal duties and staffing.

Furthermore, members of the Royal Family in receipt of an allowance will in future be subject to taxation. Royal Family members will be required to pay individual income tax on their salaries, as well as to pay value-added tax and excise duties. As a result of both direct and indirect taxation, the net amount of the allowances will be reduced.

Finally, to ensure transparency, audits (excluding salaries) are to be carried out by both the First President and the President of the Belgian Court of Auditors. In addition, the principal appropriations of the allowances (excluding salaries) are to be published, and details of total spending on the monarchy are to be collated and published in the Budget.

According to the Belgian Government, the allowance reform is the most significant in the history of the Belgian monarchy.

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