Belgium Paves Way For 'Additional Regional Tax'

by Ulrika Lomas, Tax-News.com, Brussels

19 December 2013

On the recommendation of Belgian Finance Minister Koen Geens, the Council of Ministers has approved a bill modifying the country's income tax code (CIR 92), to allow the imposition of an additional regional tax on individual income tax, from 2015.

The additional regional tax is provided for under III/I of the special law from January 16, 1989, relating to the financing of Belgium's Communities and Regions.

Belgium's Special Finance Act for the Communities and Regions has been reformed, expanding the fiscal autonomy of the Regions. Consequently, the Regions will be able to levy additional taxes on a portion of individual income tax, accord tax reductions, apply tax increases and tax reductions, and grant reimbursable tax credits.

Furthermore, the Regions will be given exclusive competencies for certain tax breaks.

The fiscal autonomy granted to the Regions amounts to a quarter of all personal income tax revenues, boosting the share of regionally-determined tax revenues from an average of below 50 percent, to an average of 70 percent, with the highest share in the Flemish Region.

The bill has now been submitted to the State Council for its examination.

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