Belgium’s Economic Repair Act aims at restoring credit and cash facilities at large, while the Companies Continuity Act mainly aims at keeping distressed companies afloat and softening the problems these companies are confronted with due to the lack of credit and cash availability. From a tax perspective, and aside from several measures that have been taken to sustain individuals’ purchasing power, the following measures have been implemented for Belgian businesses:
- the exercise period in tax advantaged stock option plans issued between 1 January 2003 and 31 August 2008 in compliance with the Stock Option Law can be extended. This enables employees to sell their stock later on, in the hope that the plummeting stock markets recover, and is limited to stock options not exceeding a face value of EUR 100,000.
- normally, payroll tax has to be remitted to the Belgian tax authorities before the 15th of the month following the month in which the salary was paid. As a temporary crisis measure, it is now possible for employers to obtain a three-month-deferred payment facility without incurring administrative penalties, and the rate of interest on overdue tax has been lowered significantly.
- as regards VAT, deferred payment facilities have been implemented in order to limit tax pre-financing costs. Moreover, administrative penalties and interest on overdue tax shall be (partially) exempted in the event of non-payment of VAT.
- the VAT rate applicable for private and public housing construction has been lowered from 21% to 6%, although limited to a taxable base of EUR 50,000.
- the scope of monthly VAT refunds to taxpayers has been extended to all businesses that are in a constant refund position due to the nature of their business, provided certain conditions are met.
- specifically aimed at rescuing distressed companies – that is to say companies confronted with short-term discontinuity – that may eventually be facing bankruptcy, tax exemptions have been implemented to the benefit of the creditors of such distressed companies, provided they agree with a court-approved debt-relief plan in favour of the distressed debtor. The tax exemption applies to the write-downs and provision for potential losses on receivables.
- on a regional level, the Flemish government has extended the time-limit within which additional municipal taxes fall due on real estate withholding tax.