The tax return form for personal income for the 2016 assessment year (2015 income) was published on 1 April 2016. We’ve prepared a brief overview of the most important new features of the form.
Section IX – Interest and capital repayments on loans and debts, premiums for individual life insurance and lease and building allowances or similar allowances, which give rise to an entitlement to a tax benefit
There were a number of changes again this year to Section IX of the return. Following on from the sixth State Reform, each Region has applied the tax rebate for the primary residence in its own way.
Regional house bonus
The first important change is that the tax rebate for the regional house bonus for contracts entered into after 1 January 2015 has been reduced. This explains the division in the return form between loans taken out in 2015 and loans taken out between 2005 and 2014.
A taxpayer living in the Flemish Region, who took out a mortgage loan on 1 January 2015 to purchase his sole and primary residence, can henceforth claim a maximum tax rebate of €1,520.00 at a fixed rate of 40.00%. This tax rebate can be increased by €760.00 for the first ten years, provided the house remains the sole residence. An additional amount of €80.00 will also be granted if the taxpayer had three dependent children when he took out the loan, meaning that you can claim a maximum of €2,360.00 in expenses for the Flemish house bonus. Of course, this applies only to mortgage loans taken out in 2015. If you still have a current loan that was taken out between 2005 and 2015, the existing system is unchanged. The 760-euro increase to the tax rebate still applies only to loans taken out since 2006. The authorities have created a separate code for this amount to make things clear.
If you took out a loan in 2015 for your primary residence, and you already had a previous mortgage loan (taken out before 2005) which is still current, you can no longer choose to have the old home-building savings system apply to the new mortgage loan. So for this mortgage loan you are only entitled to claim the house bonus tax rebate.
However, this measure does not apply in Wallonia or the Brussels-Capital Region. For residents of Wallonia or the Brussels-Capital Region, a mortgage loan taken out in 2015 is still eligible for the regional tax rebate for home-building savings.
From the 2017 assessment year onwards, the integrated Flemish house bonus will come into effect, affecting mortgage loans taken out on or after 1 January 2016.
No changes have been made to the house bonus in the Brussels-Capital Region. But from the 2018 assessment year onwards, the house bonus will be completely scrapped in Brussels.
Expenses for mortgage loans not related to your primary residence
If you have incurred expenses for loans relating to real property that does not currently qualify as your primary residence, under Item C you have to record: "expenses not related to your primary residence".
A taxpayer who has taken out a mortgage loan for real property which, at the time the loan was taken out, was her sole and primary residence, can claim the federal house bonus. Here, too, the taxpayer must indicate whether the loan was taken out before 2006.
Unlike last year, expenses relating to real property other than the primary residence are eligible for the long-term savings rebate.
Section X – Tax rebates
Burglary protection expenses
The tax rebate for home burglary protection has been definitively scrapped in the Flemish and Walloon regions. In the Brussels-Capital Region, this tax rebate still exists for the 2016 assessment year, but from the 2017 assessment year onwards, it will disappear here too.
The Walloon Region has reduced the tax rebate for expenditure incurred on service vouchers. Residents of the Walloon Region will henceforth only have to state the number of service vouchers. For the Flemish and Brussels-Capital Regions, you can still claim the expenditure incurred on service vouchers.
Tax shelter for start-up SMEs
The purpose of the tax shelter for start-up SMEs is to support the launching of SMEs through financial contributions by private investors. The government hopes this will get the economy moving again by prising open fat savings passbooks.
Three favourable measures have been introduced: the tax shelter for investments in shares, exemption from interest of certain loans, and partial exemption from the obligation to transfer payroll tax.
Natural persons who subscribe to new shares in a small start-up company can henceforth claim a tax rebate.
Taxpayers must record the payments made to purchase these shares in their personal income tax returns. A distinction will be made between payments made to small enterprises (30% tax rebate) and those made to micro-enterprises (45% tax rebate).
Taxpayers can also support an SME by granting a loan via a crowdfunding platform over a period of at least 4 years. For the 2016 assessment year, the amount that can be borrowed is limited to a maximum of €15,000.00. The interest you receive from the SME in relation to this maximum borrowed amount is exempt from tax.
Section XIV – Overseas accounts and individual life insurance, legal arrangements and loans to start-up companies
Taxpayers who state that they are the founder or fiscal beneficiary of a legal arrangement are henceforth required to provide the information listed below to the tax authorities. This is a direct result of the introduction of the Cayman tax.
- Full name of the founder or third-party beneficiary
- Full name, legal form and address of the legal arrangement
- Identification number of the legal arrangement, if any
- Name and address of the manager of the legal arrangement (for fiduciary or discretionary structures such as trusts)
- Is the legal arrangement an entity described in Section 5/1(3)(b) of the Income Tax Code 1992? You have to tick this box if the legal arrangement includes a genuine economic activity. The income from these arrangements will not be subject to the Cayman tax if, at the request of the tax authorities, the taxpayer can show that these conditions have been met.
The new tax return form does not contain any separate section in which income subject to the Cayman tax must be reported. If you have received this type of income, you should record it in the other sections of the form according to its nature (income from real property or movable property, professional income or miscellaneous income).
Tax shelter for start-up SMEs: loans to start-up companies
If taxpayers have claimed the new "tax shelter for start-up enterprises" rebate and used a recognised crowdfunding platform, they should specify under this item the number of loans made via that platform.
The ongoing regionalisation of the personal income tax system has clearly left its mark on the tax return form. This year again we have seen an increase in the number of codes, which continues to increase the complexity of the personal income tax system.
The filing dates have not yet been announced by the tax authorities. It is expected that paper returns will have to be filed around the end of June. Those who intend to file their returns electronically will probably have until mid-July.
The tax authorities have advised that your electronic return will be available via tax-on-web from 26 April 2016. If you opt to have your return filed by an agent, you will have several extra months.
We’re following the situation closely and are of course always at your disposal if you have any questions/comments about your personal income tax return.
Authors: Nathalie Van Diest and Anke Van Loey