30 October 2017 / article

Tax Reform: Impacts on the tax procedure

The new tax reform modifies the tax procedure on several aspects related to the real estate sector.

The modifications relate to:

  • Non deductibility of fines and penalties;
  • Minimum taxable base in case of absence or late corporate income tax return;
  • Late interest and moratorium interest; and
  • Effective payment in case of tax audit

Non deductibility of fines and penalties

As from tax year 2021 (taxable periods starting on or after 1/1/2020), all administrative fines and penalties, even in the absence of criminal character and even when their calculation is based on a deductible tax (e.g. VAT or transfer taxes) shall be non-deductible for corporate income tax purposes.

Minimum taxable base in case of absence or late corporate income tax return

The absence of filing of a tax return, or the late filing shall be sanctioned by the application of a minimum taxable base. For the tax years 2019 and 2020, this minimum taxable base shall be equal to 34,000 EUR, subject to a possible increase to be further determined by Royal Decree, this amount being set at 40,000 EUR as from tax year 2021, subject to indexation to be further determined by Royal Decree.

Late interest and moratorium interest

As from 1 January 2018, the interest applicable for late payment shall not be equal anymore to the legal interest but to the average interest of the OLA 10-year for the months July, August and September of the preceding year, with a minimum of 4% and a maximum of 10%. The moratorium interest in case of reimbursement shall be determined the same way, and decreased by 2%.

Effective payment in case of tax audit

As from tax year 2019 (taxable periods starting on or after 1/1/2018), a taxpayer shall not be authorised anymore to impute tax deductions (at the exception of the dividend received deduction) on a tax rectification with tax increase further to an audit. In other words, in case of tax audit leading to a rectification, the taxpayer will be obliged to make an effective payment.

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