The Belgian Chamber of Representatives, on 2 May, 2024, passed the law on various tax provisions including initiatives for reforming investment deductions.
Other notable measures include provisions concerning the Pillar Two Global Minimum Tax and the implementation of the new OECD administrative guidance, as well as modifications to the global minimum tax law, which was approved in December, 2023.
Other important measures include:
- Adoption of OECD’s administrative guidance from December, 2023, concerning the application of transitional CbC (Country-by-Country) safe harbours, including the application of anti-hybrid regulations.
- Modification of the safe harbour provision for Multinational Enterprise (MNE) groups in the early stages of international operations clarifying its extension to the application of Income Inclusion Rule (IIR) application is contingent upon the ultimate parent entity’s jurisdiction being low-taxed.
- Modification of the innovation deduction to permit taxpayers to cap the application of deduction in a given year, ensuring a minimum 15% tax rate, with the option of carrying forward the remaining deduction indefinitely.
- The introduction of provisions for MNE groups, allowing each constituent entity to incorporate dividends from all portfolio shareholdings in calculating their GloBE (Global Anti-Base Erosion) income or loss as per the OECD’s administrative guidance from February, 2023.
- The inclusion of safe harbour rules, including simplified calculations for non-material constituent entities, the QDMTT (Qualified Domestic Minimum Top-up Tax) safe harbour measures, and UTPR (Under Taxed Payments Rule) safe harbour provisions.
- The introduction of regulations for allocating taxes under a blended Controlled Foreign Corporation (CFC) tax regime under OECD’s administrative guidance from December 2023.
The regulations will be effective from the same dates as the minimum tax legislation, which is for tax years starting on or after 31 December, 2023.
