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.