Belgian budget includes temporary minimum tax; abolishes NID for some; amends FTC on royalties

In detail

The tax provisions would:

• Enact a temporary Belgian minimum tax. After the delay in implementing the OECD’s Pillar Two global minimum tax for one year (expected entry into force on January 1, 2024 instead of January 1, 2023), Belgium will introduce a one-time measure that reduces the use of the tax assets in the current ‘basket system’ from 70% to 40% (above the EUR 1 million minimum threshold). This measure would apply until Belgium implements the Pillar Two Model Rules. 
• Abolish the notional interest deduction regime for large companies. The regime would remain available for small and medium enterprises. 
• Change the lump sum foreign tax credit on royalties of 15% to a credit based on the actual foreign withholding tax applied. 
• Result in the financial sector making additional revenue contributions since the banking tax and the insurance tax no longer would be (fully) tax-deductible. 
• Reduce the scope of the copyright regime, likely applying only in situations of direct commercialization of the copyrights.

The energy provisions would:

• Introduce a tax on surpluses in the energy sector through June 2023 (to be extended if authorized by the European Commission). The tax would be retroactive to January 1, 2022.
• Retain the reduced rate of 6% VAT on gas and electricity. In addition, a reform of the excise duties on gas and electricity is expected.