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Tax Insights September 2020 - Corporate Income Tax support measures in the context of the Coronavirus - Update

With the  Act of 15 July 2020 containing various tax measures with respect to the COVID-19 pandemic, also known as “Corona Law no° 3”, the Belgian federal Parliament decided to adopt several tax measures in order to soften the impact of the COVID-19 crisis on our business activity and economy. Please find below the main measures that may impact your daily business and your enterprise.  

INVESTMENT DEDUCTION – TEMPORARY INCREASE OF THE TAX RATE

In order to encourage SME’s and self-employed workers in their investment projects during  the corona pandemic, the Parliament has decided to increase the investment deduction percentage from 8% to 25% for new investments that are directly linked to the business activity of the company. The new measure is only applicable for fixed assets that are obtained between 12 March 2020 and 31 December 2020. 

Furthermore, the carried-forward investment deduction that cannot be used due to the lack or insufficient of benefits can be carried forward during the two following taxable periods for fixed assets that were acquired or achieved in 2019. In other words, the taxpayers can, in these unusual circumstances, carry forward their investment deduction until the taxable period 2021.

RECEPTION COSTS DEDUCTION – TEMPORARY INCREASE OF THE TAX RATE 

The coronavirus crisis is severely affecting the horeca sector as well as the event industry. Reception costs are subject to a 50% deductibility limitation in both per. In order to support these sectors and to encourage companies and individuals to make use of catering services, the tax deductibility of reception costs is increased from 50% to 100% for costs incurred between 8 June 2020 and 31 December 2020

However, the deductibility limitation for business gifts (50%) and restaurant costs (69%) remains applicable.

CONSUMPTION VOUCHERS

Besides the traditional meal- and ecovouchers, companies can now grant so-called “consumption vouchers” of maximum 300 EUR to their employees until 31 December 2020. The consumption vouchers are 100% deductible for employers and tax-exempted for employees provided that certain conditions are respected.  

If you would like to receive additional information on this matter, the InterTax team of RSM Belgium is at your disposal: [email protected].  

RSM INTERTAX

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