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Communal Taxes Soar In Belgian Capital

by Ulrika Lomas, Tax-News.com, Brussels

20 December 2013


The communal tax burden on enterprises in Brussels is currently twice the level recorded in Flemish Brabant and Walloon Brabant, according to a study conducted by Belgian industry federations Agoria, BECI, and Comeos.

Although there are undoubtedly regional disparities in the tax burden in Belgium, the difference is much more acute at communal level. The communal property tax, levied on machinery and equipment for example, is twice as high in communes in Brussels. The tax on office space represents 50 percent of total communal taxes payable by businesses.

The tax burden is highest in the Belgian communes of Saint-Josse-ten-Noode, the City of Brussels, Schaerbeek, and Evere.

Communal taxes have risen sharply in Brussels between 2007 and 2012. Over the five-year period, communal levies rose by 6.5 percent in Brussels, by 0.3 percent in Flemish Brabant, and by 3.1 percent in Walloon Brabant. Taxes increased by an additional 8.7 percent in Brussels this year.

Commenting, the industry federations warned that this high tax burden is weighing heavily on the competitiveness of enterprises in Belgium and, specifically, on job creation. Underscoring that the tax burden has a significant bearing on the choice of geographical business location, the groups pointed out that Brussels is becoming an altogether less attractive option.

Underlining the need for a reduction in corporate taxes, the employers' organizations advocated an "urgent" reform of the fiscal pact concluded between the federal Government and the communes and recommended that communal taxes be harmonized, "even if this is difficult."

Finally, the federations emphasized the importance of revising or abolishing the property tax imposed on machinery and equipment, which is hindering new investment, as well as the need to overhaul the taxes imposed on printed advertising, on signs, and on commercial and office premises.

Concluding, Olivier Willcox, CEO of BECI made clear that the tax burden has simply become "intolerable" for some companies.

TAGS: tax | investment | business | Belgium | property tax | corporation tax | tax rates | tax reform | Tax

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