Archive TMAS Newsalert - June 2011


Due date resident corporate income tax return

The due date for submitting the resident corporate income tax return for assessment year 2011 has been announced on 6 May 2011 (www.minfin.fgov.be). Belgian companies closing on 31/12/2010 should introduce the tax return before or on:

  • 15 September 2011 (paper filing)
  • 13 October 2011 (electronic filing)

 

BizTax replaces VenSoc

A Belgian company introducing the resident corporate income tax return electronically, will have to use BizTax as from assessment year 2011. BizTax is the successor of VenSoc.

The VenSoc-application was introduced in 2005 and in the meantime, the tax administration already received more than 50% of the resident corporate tax returns via VenSoc.

The new application BizTax (www.biztax.be) uses eXtensible Business Reporting Language (XBRL), a technology which is also used by the National Bank of Belgium for depositing statutory financial statements. BizTax requires companies to review their internal procedures as well as the interaction with their tax adviser.

The new Biztax-tool provides two options to file the tax return. The person that will be signing the return by means of electronic ID-card or digital signature has the option to complete the tax return and special tax forms online or to upload an XBRL-file generated by external software. This software is however not provided by the Belgian tax administration.

BizTax does not longer provide the possibility to complete the tax return and special tax forms (i.e. pdf-documents with a specific file-name) on your local hard disk and to upload these files subsequently through the application.

The lay-out of the tax return form has changed significantly compared to the tax return of assessment year 2010. However, Belgian companies should not disclose substantial additional information.

 

Fee forms 281.50

Paid and/or attributed commissions, brokerage fees, trade-discounts, ex-gratia payments, professional fees, payments and fringe benefits, etc. that constitute earned income in the hands of the recipient are to be reported on a form 281.50 by 30 June 2011.

This submission is to be done online through www.belcotaxonweb.be. Failure to submit before the deadline can result in a separate assessment amounting to 309% of the unreported amount.

Commissions, fees, etc. paid or attributed to non-residents without a Belgian establishment (e.g. management fees paid to a group entity established in another country, fee to a foreign PwC-office,…) also have to be reported on a form 281.50, even in case an invoice is available. According to a Circular Letter of 19 February 2009 there are no exceptions to this rule anymore.

One is however not obliged to submit a form 281.50 for commissions, brokerage fees and professionals fees when the recipient is subject to the Law of 17 July 1975 on the accounting and annual accounts of companies and has issued an invoice compliant with Belgian VAT-law.

For more more information, click here or contact our core teams:


Brussels:

Lieven Schoonjans (lieven.schoonjans@pwc.be)

Kristel Verbruggen (kristel.verbruggen@pwc.be)

Melissa Vandevelde (melissa.vandevelde@pwc.be)

 

Antwerp:

Ilse Wouters (ilse.wouters@pwc.be)

Tom Heremans (tom.heremans@pwc.be)

Inge Meynen (inge.meynen@pwc.be)

 

Ghent:

Tim Pieters (tim.pieters@pwc.be)

Inge Bouwens (inge.bouwens@pwc.be)

 

“Shareholder Rights Act”

On 18 April 2011, the ‘Shareholder Rights Act’ [1] was announced in the Belgian Official Gazette. The act contains new rules for organising shareholders’ general meetings (calling meetings, the details to be put in notices of meetings, the registration date system, limiting the number of proxies per shareholder, distance voting etc.).

Listed companies have to amend their articles of association in line with the new act by 1 January 2012. In addition to the provisions applying specifically to listed companies, the act also introduces options for unlisted companies.

For instance, unlisted public companies, private companies and limited cooperatives can allow shareholders and members to take part in general meetings and cast their votes remotely using electronic means of telecommunication.

If unlisted companies want to make use of the new act’s possibilities, they have to amend their articles of association. If their current articles contain provisions contrary to the terms laid down in the act, they will have to amend them before 1 January 2012.

It should also be pointed out that the act contains an express prohibition against shareholder proxies of unlimited validity for use at general meetings.

 

1 Act of 20 December 2010 on the exercise of certain rights by shareholders of listed companies.

ASC notice 2011/9 – Effect of amicable accords and judicial reorganisations on debts and receivables

In its Business Continuity Act (31 January 2009), the government has taken action to help companies in difficulties to avoid insolvency. Amicable accord and judicial reorganisation procedures now offer companies new possibilities to extricate themselves from their financial difficulties.

The parties can freely fix the terms of an amicable accord without judicial oversight.

Under a judicial reorganisation, which is overseen by the court, the following is possible:

  • an amicable accord
  • a collective accord (‘creditors’ arrangement’)
  • control of (part of) the company in difficulties can be handed over to the judicial authorities for a certain period of time

ASC notice 2011/9 lays down the proper accounting treatment in the hands of the debtor and creditor in the following cases:

Waiver of debt

The time at which the debtor should record a write-down on its debt, depends on the procedure involved:

  • at the time of signing an amicable settlement;
  • at the time the court ratifies an amicable scheme of reorganisation;
  • at the time the court ratifies a collective scheme of reorganisation.

Changes to the tax laws (section 48(1) ITC 92) mean that the extraordinary income is treated as tax-free (though the intangibility condition should be met) until the agreement or scheme of reorganisation is fully complete, whereupon the tax-free treatment becomes ‘final’. Referring to the corporate income tax return form for assessment year 2011, the new codes 019, 312 and 328 are to be used where the company in reorganisation can claim provisional or final tax-free treatment of the extraordinary income recorded.

At the time the debt is written down, the creditor can also write down his receivable. Unlike a normal write-down on receivables, which can be considered tax-free if certain conditions are met, a write-down under the Business Continuity Act is automatically deemed tax-free (section 48 ITC 92).

Interest-free payables under the Business Continuity Act

Within the scope of the Act, companies in difficulties can treat a payable resulting from a trade transaction as an interest-free loan without discounting the amount. From an accounting perspective, a statutory reclassification is required.

Plus, in the hands of the creditor agreeing to the postponed payment, the amount of the receivable should not be discounted. If the creditor agrees not to claim interest, a write-down can be recorded within the terms of the Act.

Contribution of (part of) payables to equity

According to the Commission, a payable can be transferred at its nominal or its economic value. It is up to the board of the recipient to value the contributed debt. Consequently, the creditor will receive shares whose value has to be measured taking into account the contract value of the contributed debt.

Correlation with the Belgian corporate income tax return for assessment year 2011

In the recently issued Belgian corporate income tax return for assessment year 2011 (Belgian Official Gazette, 19 April 2011), the tax authorities include three new codes that are of interest to debtors in terms of the Business Continuity Act.

For creditors impacted by the Act and that have recorded a write-down in that connection, nothing changes in their tax return, and the relevant amounts should be entered under the existing codes 301 and/or 316 “Write-downs on trade receivables”.

For the sake of completeness, it should be noted that the tax authorities consider the documents in which an exemption is claimed for profit from ratification of a scheme of reorganisation or ratification of an amicable agreement as comprising part of the corporate income tax return. Thus, if a company applies the Business Continuity Act, it must add copies of these documents to its tax return for it to be complete.