The Belgian Programme Law of July 1, 2016, provides for a special regime covering the so-called 'sharing economy' (in French : "l'économie collaborative"; in Dutch : "deeleconomie"), which applies as from July 1, 2016.
This special regime aims at covering the income tax, social security and VAT implications of the sharing economy and is applicable to :
- services that are rendered (i.e. the supply of goods is excluded),
- by one individual to another individual,
- who both act outside of the scope of a professional activity,
- through a recognised on-line platform (the terms and conditions thereof still have to be determined),
- and in so far as the payment therefor is made through such on-line platform.The relevant features of this special regime can be summarized as follows.
1. Treatment for the individuals concerned
- Income tax
Income generated by rendering sharing economy services (e.g. similar to those rendered by Airbnb, BlaBlaCar, etc.) is considered to be miscellaneous income. The gross income is reduced with 50% (which percentage is deemed to represent lump sum expenses incurred when rendering the services) and the net income remaining is taxed separately at the rate of 20%. This boils thus down to an actual tax rate of 10% (to be increased with communal surtaxes).
The income tax characterization as miscellaneous income only applies to the extent that :
- The gross income so received does not exceed EUR 5,000 per year. This amount is subject to indexation and is reduced to EUR 2,500 for income year 2016 since the special regime only entered into force as from July 1.If this threshold is exceeded in year 1, all income generated by rendering sharing economy services is as a matter of principle considered to be professional income and is subject to the normal rules (i.e. deduction of actually incurred business expenses and application of progressive bracket rates). This applies not only for year 1 but also for the subsequent year 2 (even if the threshold is not exceeded in year 2), it being understood that a taxpayer is allowed to rebut such presumption.
- The characterization as miscellaneous income is consistent with the normally applicable income tax rules. As such, the special regime does not apply to income resulting from leasing real estate (which is treated as real estate income) or from leasing personal property (which is treated as movable property income).For example, leasing a room does not fall under the scope of application of the special regime. If in addition, however, supplementary services are rendered (e.g. preparing breakfast, cleaning the room, etc.), only the latter supplementary services are covered by the special regime. If a global price is charged, 20% of such global price is deemed to cover the supplementary services and only these 20% are to be taken into consideration for purposes of determining whether the EUR 5,000 threshold is exceeded or not. - The on-line platform provider must apply the withholding tax to each qualifying payment that is made through such platform and must establish annual fiscal vouchers. The latter will allow the individuals concerned to correctly fill out their Belgian income tax return.
- Social security
Individuals rendering sharing economy services do not have to register as a self-employed person for social security purposes for as long as the EUR 5,000 threshold is not exceeded.
- Value added tax
Individuals rendering sharing economy services do not have to register as VAT payers for as long as the EUR 5,000 threshold is not exceeded.
2. Treatment for the on-line platform providers
The legislation does not provide for specific tax rules for the on-line platform providers so that one has to fall back on the general applicable tax rules. Accordingly, for foreign on-line service providers one will have to examine in each individual case whether they can be deemed to have a taxable permanent establishment in Belgium, in which case the net profit attributable to such a permanent establishment will be taxable in Belgium. Likewise, one will have to examine in each individual case whether they can be deemed to have a permanent establishment for VAT purposes or whether they need to otherwise register for VAT purposes.
Details regarding the conditions / procedure for being recognized as an on-line platform provider are not yet available.
The purpose of the government is to set a legal framework for the sharing economy, with the aim to simplify the formalities for the individuals concerned to the maximum extent possible and to tax the individuals concerned in a favourable manner. The legislation does not provide for specific tax rules for the on-line platform providers. The terms and conditions for on-line platforms to become recognized will be defined in the near future.