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Belgium avoids VAT rise with ‘Fairness Tax’

  • VAT
  • 09 July 2013 | Richard Asquith

Belgium avoids VAT rise with ‘Fairness Tax’

As part of Belgium’s attempts to fill the 2014 Budget gap, and meet the Euro-currency 3% deficit target, it has decide to avoid a Belgian Value Added Tax rise.

The current Belgian VAT rate is 21%, which is close to the EU average VAT rate of over 21%.  For some time, Belgium has been considering a rise to plug the fiscal deficit.

However, it has now announced a novel new tax on holding companies which issue dividends.  The new ‘Fairness Tax’ will be charged at 5% of dividends paid out.  It is in effect a type of withholding tax – although it cannot be offset against other income tax charges on the dividend income.  Income from patents will be excluded.

This move still leaves Belgium short by €1 billion for the 2014 budget.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.