An overview of the approved end-of-year laws

In our last newsletter we told you about the legislative amendments that were in the pipeline. These initiatives were passed with the New Year and were thus effective as of 1 January 2017. What follows is a brief overview of the new measures.

The speculation tax on the rapid sale of listed shares was ditched in respect of the capital gains as of 1 January 2017.

But the scope of the tax on stock exchange transactions was widened to include investments abroad and the maximum sums for the tax were increased as follows:

  • €1,300 for the sale and purchase of bonds
  • €1,600 for the sale and purchase of other securities
  • €4,000 for the sale and purchase of capitalisation shares

Please note that the above changes to the tax on stock exchange transactions are applicable to transactions performed as of 1 January 2017.

The issue of the internal capital gains has led to a great deal of debate in recent years. As of 1 January 2017 a specific anti-abuse provision has been included in the law that provides a new definition for the term ‘paid-up capital’ with respect to a holding company. Only the purchase value paid by the contributor at the time for the shares will now be deemed to be paid-up capital. The difference between the actual value of the contributed shares and the purchase value paid by the contributor will henceforth be classified as a taxed capital reserve. This means that, as of 1 January 2017 there will no longer be an issue of a so-called step-up, and tax-free distribution at a later stage is thus also no longer possible.

As already stated, company cars have been more expensive since 1 January 2017, and 17% of the benefit in kind for the private use of company cars is no longer non-deductible in the corporation tax return, but it is now 40% insofar as the fuel costs are partially or fully remunerated by the employer. Moreover, the 17% or 40% non-deductibility now applies to all benefits in kind, irrespective of whether the employee or business manager has paid a contribution (for example, when a benefit in kind is paid through a current account or by means of an invoice). Finally, the CO2 reference emissions for cars powered by petrol has been lowered to 105 g/km and to 87 g/km for diesel-powered cars. The minimum benefit in kind for a company car for the 2018 tax year is now also known and it amounts to €1,280.

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