In May 2016, the Council of Ministers agreed on harmonizing several Belgian bank taxes and levies into one single “New bank tax”. Today, its proposal was approved by the Belgian parliament. The introduction of this new bank tax, through the amendment of the existing annual tax on credit institutions, will lead to a simplification of the formalities to be complied with but also to an increase of the overall tax contribution of the banking sector.
The bank taxes and levies which will be annulled and replaced by the new bank tax are the annual tax on saving accounts, the annual tax on credit institutions, the financial stability contribution and the more recently introduced bank tax limiting the offset of the notional interest deduction (NID), the participation exemption and the deduction of tax losses. The European contributions (deposit guarantee scheme and European single resolution fund) will not be affected by the new bank tax.
The new bank tax will apply to both Belgian legal entities and Belgian branches of foreign banks.
The calculation base of the new tax consists of the average of reported Belgian “debt towards clients” (as mentioned on Line 229 in table 00.20 of Scheme A – territorial base) of the year preceding the assessment year. The average being calculated based on the amounts reported at the end of each month. According to the Explanatory Memorandum, even though no risk weighing factors are taken into account, the change in calculation base should result in a shift in tax burden.
A rate of 0,13231% will be applied in 2016. Each year, this rate will be amended in order to reach the predetermined budget of EUR 805 million (announced as a maximum amount for this new bank tax).
As a transitional measure, every credit institution and branch subject to the new bank tax are required to pay the new tax ultimately on November 15, 2016. The tax for 2016 will be calculated based on the “debt towards clients” as per December 31, 2015, without taking into account the 2015 averages. The amounts already paid with regard to both annual taxes can be deducted from the amount due. Also the financial stability contribution already paid to the Belgian Resolution Fund can be deducted from the amount due. The recently introduced limitation of the NID, participation exemption and deduction of tax losses for banks will be annulled as from assessment year 2017.
Should you have any questions regarding this new legislation, please do not hesitate to get in touch with your KPMG contact to help answer any questions you may have regarding these new regulations.
© 2018 KPMG Tax and Legal Advisers, a Belgian Civil Cooperative Company with Limited Liability (burg. CVBA/SCRL civile) and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.