The Belgian parliament approved proposed legislation to harmonize and combine several Belgian bank taxes and levies into a single “bank tax.” The bank tax is expected to simplify compliance, but also to increase the overall tax contribution of the banking sector.
Existing bank taxes and levies—including the annual tax on saving accounts, the annual tax on credit institutions, the financial stability contribution, and the bank tax limiting the offset of the notional interest deduction (NID), the participation exemption, and the deduction of tax losses—are to be repealed and replaced by the new bank tax The European contributions (deposit guarantee scheme and European single resolution fund) will not be affected by the new bank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 new bank tax calculation will depend on the average of reported Belgian “debt towards clients” (from Line 229 in table 00.20 of Scheme A – territorial base) for the year preceding the assessment year, with the “average” being based on the amounts reported at the end of each month. According to the legislation’s explanatory memorandum, even though no risk weighing factors are taken into account, the change in calculation base is expected to 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 €805 million (announced as a maximum amount for this new bank tax).
As a transitional measure, each credit institution and branch subject to the new bank tax will be required to pay the new tax by 15 November 2016. The tax for 2016 will be calculated based on the “debt towards clients” as of 31 December 2015, without taking into account the 2015 averages. Amounts already paid with regard to both annual taxes and the financial stability contribution already paid to the Belgian resolution fund can be subtracted from the amount of bank tax due. The recently introduced rules concerning the NID limitation, participation exemption, and deduction of tax losses for banks will be repealed as from assessment year 2017.
Read a July 2016 report prepared by the KPMG member firm in Belgium: Parliament approves new bank tax
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.
KPMG's new digital platform