Corporate tax compliance | KPMG | BE
close
Share with your friends

Corporate tax compliance – Prepayments and corporate tax return due dates

Corporate tax compliance

As the first half of 2018 is coming to its end, it is time to look forward to the tax opportunities and challenges. The coming second installment of prepayments is an opportunity for every company in a tax paying position, whereas the timely filing of tax returns and local files can also be a challenge.

1000

Related content

Corporate tax compliance – Prepayments and corporate tax return due dates

Filing due dates

A.      Income tax returns

The tax authorities confirmed that for companies with a financial year ending on December, 31st 2017, the deadline of the filing of the corporate/non-resident income tax returns is fixed to September 27, 2018 at the latest. 

It is of key importance that these documents are filed on time. An extension of the deadline is not easily granted by the tax authorities and currently almost impossible to obtain (in very specific circumstances only).

 

B.      Local Transfer Pricing documentation

In 2016, Belgium introduced additional documentation obligations: the CBC notification, the Local File and the Master File. These documents will need to be filed if a company or the group of companies exceeds certain thresholds. We refer to our previous e-tax flash for more detail on the transfer pricing obligations.

The local file will need to be introduced together with the tax return on 27 September 2018. The CBC notification and the Master File will need to be filed within 12 months after the last day of the reporting period of the group. For companies with a group reporting period ending on December 31st 2017, these documents need to be filed on December 31st 2018 at the latest. 

 

C.      Penalties

In general, late or no qualifying filing can have severe consequences, ranging from administrative fines and tax increases up to 200% to criminal penalties and an assessment ex officio. Moreover, the tax authorities will have more time to challenge the tax position of the company.

General information concerning prepayments

As mentioned in our earlier communication, every company in a tax paying position can prepay its CIT.  This way, a company can avoid the surcharge that applies if no or not enough prepayments are made. Each tax prepayment leads to a credit, which reduces the overall CIT surcharge. We refer to our e-tax flash of March (for further details).

Prepayments in the second quarter of 2018

For assessment year 2019 a surcharge rate of 6,75% on the tax liability of a company applies. For the first quarter, a credit of 9% applies, for the second quarter 7,5%, for the third quarter the rate is 6% and for the last quarter 4,5%. 

A company that has not yet made any prepayments in financial year 2018 can still do so in the second quarter until July, 10th  (for companies with financial year ending 31st December). It allows the company to reduce its tax liability while benefiting from a credit of 7,5%. If the company would make the prepayment in the third quarter, it would need to pay more to obtain the same tax credit.

This can be illustrated by an example:

Company A does not make prepayments at all, company B makes its first prepayments of 45.000 in July and company C makes the same prepayments in September. All companies have a financial year ending December 31st.

EUR Company A Company B Company C
Taxable base 300.000 300.000 300.000
Tax liability 88.740 88.740 88.740
Prepayments 0
first quarter
45.000
second quarter
45.000
third quarter
Surcharge : 88.740 x 6.75% 5.989,95 5.989,95 5.989,95
Tax credit: 0 0    

7,5% x 45.000

6 % x 45.000

 

(3.375)

 

 

(2.700)

Increase 5.289,95 2.614,95 3.289,95

Please note that companies that made prepayments in the first quarter can still benefit from a second prepayment: it can decrease their tax liability even more.

If calculated correctly, a second prepayment can ensure that the company does not need to pay a substantial amount of tax anymore when it receives its tax assessment note.

(The deadlines mentioned above apply to companies with a year ending on December, 31st 2017. To know the specific filing dates for companies with a year end closing on another date, we recommend to contact your KPMG Tax Advisor.)

Key points

To avoid extra tax liabilities, it is important to take care of all compliance matters in due time and to make sufficient prepayments. The second quarter still offers a good opportunity to make these prepayments, which benefit from a credit of 7,5%. This is especially relevant for companies that have not done a prepayment in the first quarter.

If you consider doing a prepayment before July, 10th, it is recommended to request the assistance of a tax advisor before the end of June. 

For more information, please contact your KPMG Tax Advisor or send an email to BE-FM CCP.

© 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.

Connect with us

 

Request for proposal

 

Submit