Key tax issues at year end for real estate investors 2016-2017

An overview of year-end to-dos and important issues in real estate taxation

This publication gives investors and fund managers an overview of year-end to-dos and important issues in real estate taxation in 34 tax systems worldwide.

International tax regimes are diverse, complex and variant, and are usually full of fixed dates, terms and deadlines.

These dates, terms and deadlines need to be observed carefully in order to avoid penalties and to receive certain tax reliefs or exemptions. At year end these obligations become even more difficult to understand and fulfil, particularly for real estate investors with investments in numerous countries.

 

Map of participating countries worldwide

 

This publication gives investors and fund managers an overview of year-end to-dos and important issues in real estate taxation in: 

AustriaBelgiumBulgariaCyprusCzech RepublicEstoniaFinlandFranceGermanyIrelandItalyLatviaLithuaniaLuxembourgMaltaNetherlandsPolandRomaniaRussian FederationSpainSwedenSwitzerlandTurkeyUnited KingdomAustraliaIndiaIndonesiaJapanSingaporeArgentinaBrazilCanadaMexico and the United States of America.

 

The most important issues in Belgium

  • The Notional Interest Deduction (NID) rate for tax year 2016 is 1,63%. For tax year 2017, that rate is 1,131%. Since 2012, new excess NID can no longer be carried forward and the 'stock' of excess NID that can be applied in a given year is limited.
  • The debt to equity ratio of a company has to be monitored to comply with the 5:1 thin cap rule and the future implementation of the ATAD interest deductibility limitation.
  • In the case of a change of control (including in case of an internal group restructuring), the application of this rule should be carefully analysed and the need of requesting a ruling on the availability of the losses should be assessed.
  • When selling real estate and applying the deferred taxation regime, properly monitor the time frame for reinvestment and tax formalities.
  • Three layers of transfer pricing documentation are introduced in our country: 

1. Country-by-country reporting (CBCR);

2. Masterfile: a global Masterfile covering information relevant to the entire group of companies;

3. Local file.

  • Monthly VAT payers that are generally in a VAT debit position (in November or December) should assess which option is best in their particular case.
  • The impact of the dividend policy on the fairness tax should be properly monitored.
  • The impact of the anti-abuse measure on real estate transactions (e.g. share deals, split sale structures) should be analysed on a case-by-case basis.
  • Belgian tax-residents have to declare their direct or indirect payments made to tax havens when these payments amount to at least €100,00. Since assessment year 2016, it is no longer required to report payments to Cyprus or Luxembourg. 
  • Since 1 January 2017, Council Implementing Regulation 1042/2013 regarding the place of supply rules applicable to real estate transactions entered into force. 

Contact us

Grégory Jurion
Partner
Tel: +32 (0)2 710 9355
Email

Ann Smolders
Partner
Tel: +32 (0)2 710 4173
Email

Follow PwC Belgium