Total Tax Contribution

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FEB and PwC on their Total Tax Contribution study
Belgian companies burdened by paying and collecting taxes

FEB and PwC have recorded all compulsory statutory levies (taxes and social security contributions) companies in Belgium either pay or collect on behalf of the authorities (all levels) in Belgium’s first Total Tax Contribution report, which was drawn up using the international method devised by PwC. The study was conducted in 2007 for the 2006 financial year. Sixty-one companies representing the most important sectors of the economy and employing a total of around 100,000 people completed the electronic questionnaire.

Here are a few general results from the study:

  • Companies in Belgium pay no fewer than 63 taxes and collect a further 32 taxes and contributions on behalf of various public authorities.
  • The companies participating in the study paid almost €1.5 billion - or 13% of their revenue - in corporate income tax. For every euro in corporate income tax, they pay another €1.26 in other levies (mainly employers’ social security contributions).
  • For every euro paid in corporate income tax, respondents collect another €4.70 in taxes and contributions on behalf of the government. Their total amount of tax collected comes to some €7 billion (mainly VAT, followed by excise duties, withholding tax on income and personal social security contributions).

Frank Dierckx , Managing Partner PwC Tax & Legal Services, comments: "The results not only confirmed the heavy burden of taxation in Belgium, but also clearly contradict the commonly held belief that the corporations do not pay their fair share of taxes. In fact, the average Total Tax Rate for the participating companies reached 52.07% of profit before all taxes and legal contributions borne, with the social security burden representing 39.95% of all business taxes borne. Corporate tax and employer social security contributions together make up 84.17% of the total taxes borne. Yet there are many other business taxes in addition to these – no less than 61 taxes make up only 15.83%, illustrating that some relatively small taxes impose a large compliance burden. The heavy burden and large volume of taxes indicates there is a clear need for transparency and awareness of the taxes being paid by companies.”

“Whatever some people may say, companies pay a lot of taxes and contributions to the authorities. Not only do they finance the authorities, they are also their contractors in that they collect many different kinds of contributions on their behalf. This twofold challenge is a considerable burden entailing high costs and a lot of responsibility. In exchange, the business world expects politicians and civil servants to ensure that legislation is clear and stable, services are well provided and the authorities operate cost-effectively. In Belgium, much of this has not been done. We therefore call on the government to make a real and rapid effort to do this,” remarked Rudi Thomaes , Chief Executive Officer of FEB.