Posted the: 2005-06-30 Numac: 2005003577 SERVICE PUBLIC FÉDÉRAL FINANCES 22 June 2005. -Law establishing a tax deduction for capital at risk (1) ALBERT II, King of the Belgians, to all, present and to come, hi.
The Chambers have adopted and we endorse the following: title I:. -Available general Article 1. This Act regulates a matter referred to in article 78 of the Constitution.
TITLE II. -Code of 1992 s. income tax 2A section 43 of the 1992 income tax Code, the words "reduced realisation expenses"shall be inserted between the words "good" and the words "and on the other hand".
S. 3 A section 201 of the same Code, replaced by the law of 28 July 1992 and amended by the Act of 4 May 1999, by the Royal Decrees of 20 July 2000 and July 13, 2001 and by the law of 27 December 2004, the following changes are made: 1 ° 1st paragraph (1), is replaced by the following provision: '1 ° as regards resident whose shares companies '. representing the majority of the voting rights, are held in competition by more than half by a or several persons, the percentage of the deduction is equal to the increase expressed in percent, of the average of the indices of prices for consumption of the Kingdom of the penultimate year preceding that in which the vintage means the tax year to which is attached the taxable period during which the investment is made compared to the average of the previous year's consumption price indices rounded to the unit greater or less depending on whether the fraction reached no 50 p.c., and increased by 1 point, but brought back to zero; »;
2 ° paragraph 2 is replaced by the following provision: "the King may, where warranted by economic circumstances, increase, by Decree deliberated in the Council of Ministers, the percentages referred to in paragraph 1, 1 ° and 2 °, in so far as they are brought back to 0.";
3 ° paragraph 4 is repealed;
4 ° article is supplemented by a new subparagraph as follows: "in the case referred to in article 70, paragraph 1, the percentage of deduction is reduced to zero."
S. 4. in title III, chapter II, section IV, of the same Code, there shall be inserted a sub-section III bis, comprising articles 205a at 205novies, which the title reads as follows: ' sub-section IIIbis '. -Deduction for risk capital. » Art. 5. in the same subsection it is inserted an article 205a, worded as follows: «art.» 205a. for the determination of taxable income, the tax base is reduced by the amount determined in accordance with article 205quater. This reduction is called "deduction for risk capital". » Art. 6. in the same subsection it is inserted an article 205ter, worded as follows: «art.» 205ter. § 1. To determine the deduction for a taxable period venture capital, risk capital to consider matches, subject to the provisions of §§ 2 to 7, in the amount of the equity of the company, at the end of the previous tax period, determined in accordance with the legislation on accounting and the annual accounts as they appear in the balance sheet.
Capital at risk determined under paragraph 1 shall be reduced by: a) tax net value at the end of the taxable period previous actions and own shares and financial fixed assets consisting of shareholdings and other stocks and shares, and b) tax net value at the end of the taxable period of the shares or units issued by investment companies whose future earnings are likely to be deducted from benefits under sections 202 and 203 § 2. When the company has one or more establishments abroad whose income is exempt under preventive double taxation agreements, capital at risk, determined in accordance with the § 1, shall be reduced by the positive difference between, on the one hand, the net book value of the assets of foreign institutions, with the exception of shares referred to in article 205ter , § 1, paragraph 2, and on the other hand, the total of the liabilities that are not equity of the company and that are attributable to these institutions.
§ 3. When are among the elements of the company's assets abroad buildings or rights of such buildings, unassigned to a foreign institution, and that the revenues of these assets are exempt under preventive double taxation conventions, the capital at risk, as determined in accordance with §§ 1 and 2, shall be reduced by the positive difference between the net book value of these elements of the assets and the liabilities total are not part of the equity of the company and which are attributable to such buildings or rights.
4. Capital at risk, determined in accordance with §§ 1 to 3, is decreased following values determined at the end of the previous tax period: 1 ° the net book value of tangible assets or a part thereof, to the extent that costs y related exceed unreasonably professional needs;
2 ° the book value of the items held as an investment and which, by their nature, are normally not intended to produce a periodic taxable income;
3 ° the carrying value of real property or other rights in rem over such property including natural persons exercising a mandate or functions referred to in article 32, paragraph 1, 1 °, their spouse or their children when these individuals or their spouse have the lawful enjoyment of the income thereof, have use.
§ 5. The risk determined in accordance with §§ 1-4, is also capital decreased expressed but unrealised gains referred to in article 44, § 1, 1 °, which do not relate to elements of the assets referred to in §§ 2 to 4, and capital subsidies.
6. When the elements referred to in §§ 1 and 3 to 5 variations occur during the taxable period, the risk capital to consider is increased or decreased, as the case may be, the amount of these variations, calculated as a weighted average and considering that changes took place on the first day of the calendar month following that in their occurrence.
Variations in the factors referred to in § 2 involved during the taxable period are taken into account under the conditions and in the manner determined by the King, by Decree deliberated in the Council of Ministers.
§ 7. For the purposes of § 1, in the head of the credit institutions referred in article 56, § 1, the insurance companies referred to in article 56, § 2, 2 °, h, and the companies referred to in article 47 of the law of 6 April 1995 on secondary markets, to the status of the investment firms and their control, investment advisors and intermediaries is meant by financial fixed assets consisting of shares and other shares and shares, the shares or who have the nature of financial assets referred to in article 202, § 2, paragraph 2.
§ 8. For taxpayers subject to the corporate income tax, which applies the law of June 27, 1921 on non-profit associations, international non-profit associations and foundations, equity, referred to the § 1 agree the social fund, as reflected in the balance sheet prepared by these taxpayers. » Art. 7. in the same subsection it is inserted an article 205quater, worded as follows: «art.» 205quater. § 1. The deduction for risk capital is equal to the capital at risk, as determined in accordance with article 205ter, multiplied by a rate set out in the following paragraphs.
§ 2. For the 2007 tax year, the rate is equal to the average of the benchmark indices J (linear bonds 10 years) published monthly by the Fund for annuities, as referred to in article 9, § 1, of the law of 4 August 1992 on mortgage credit, for the year 2005.
§ 3. For subsequent taxation years, the applicable rate is fixed with respect to the average of the benchmark indices J referred to in § 2 for the penultimate year preceding that in which the vintage designates the tax year.
The rate applicable to determine the amount of the deduction for risk capital referred to in article 205a cannot, for each taxation year referred to in the previous paragraph, deviate more from a point of the rate applied in the previous taxation year.
§ 4. The King may, by royal decree deliberated in the Council of Ministers, decide not to apply the limit referred to in § 3, paragraph 2, and secure, outside this limit, another rate to determine the amount of the deduction for capital at risk, but limited by the rate corresponding to the reference index J referred to in § 2 for the penultimate year preceding that in which the vintage means the tax year.
5. The rate determined in accordance with §§ 2 to 4 cannot be greater than 6.5 sq. ft.
The King may, by royal decree deliberated in the Council of Ministers, derogate from the rate referred to in paragraph 1.
6. For companies which, in accordance with certain criteria laid down in article 15, § 1, of the Code of corporations, are considered small companies for the year related to the taxable period during which they have benefited from the deduction for risk capital, the rate determined in accordance with §§ 2 to 5 shall be increased by half a point.
§ 7. By royal decree deliberated in the Council of Ministers, the King determines the modalities for the calculation of the deduction for risk capital for the first taxable period of a corporation and when the taxable period is more than or less than twelve months. ».
S. 8. in the same subsection it is inserted an article 205quinquies, worded as follows: «art.» 205quinquies. in case of absence or lack of profits of a taxable period for which the deduction for risk capital can be inferred, the exemption not granted for this taxable period referred successively on the benefits of the next seven years. » Art. 9. in the same subsection it is inserted an article 205sexies, worded as follows: «art.» 205sexies. the deduction for risk capital is granted provided that an amount equal to the deduction for risk capital for the taxable period, is worn and maintained to an unavailable account separate liability and where it does not base the calculation of the annual allocation of the legal reserve or pay or remit any during the taxable period and the three years that follow.
When it is no longer satisfied the obligation referred to in paragraph 1 for the deduction for capital at risk of a given taxable period, the party already effectively granted is imposed as a income for the taxable period during which the non-compliance occurred and not actually granted balance loses her right to be postponed referred to in article 205quinquies. » Art. 10. in the same subsection it is inserted an article 205septies, worded as follows: «art.» . 205septies in order to justify the benefit of the deduction for venture capital, the company must attach to its statement to the corporate tax a survey which the model is established by the Minister of finance or his delegate, for the tax year for which it benefits from the deduction. ».
S. 11. in the same subsection it is inserted an article 205octies, worded as follows: «art.» 205octies. articles 205a to 205septies shall not apply to the following companies: 1 ° centers coordination approved who continue to benefit from the provisions laid down by order royal no 187 of 30 December 1982 concerning the establishment of coordination centres;
2 ° companies established an area of conversion under the Act of 31 July 1984 relief as long as for the taxable period concerned, they still benefit from the provisions of section 59 of the Act;
3 ° the sociétés d'investissement à capital variable (SICAV), fixed capital (SICAF) or in receivables (SIC) defined respectively in articles 14, 19 and 24 of the law of 20 July 2004 on certain forms of collective management of investment portfolios;
4 ° cooperative societies in participation, in application of the law of 22 May 2001 on to plans for the participation of workers in the capital and corporate profits;
5 ° shipping companies which are subject to tax in accordance with articles 115-121 or article 124 of the programme act of 2 August 2002. » Art.
12. in the same subsection it is inserted an article 205novies, worded as follows: «art.»
205novies. If the company is an immune investment reserve referred to in article 194quater for a taxable period, 205a to 205quinquies articles are not for this taxable period as well as for two subsequent taxable periods. In this case, the seven year period referred to in article 205quinquies is extended by the number of full years during which 205a to 205quinquies articles shall not apply. » Art. 13A article 207, paragraph 3, of the same Code, inserted by the royal decree of 20 December 1996, it is inserted between the first and second indent a new indent worded as follows: "-by way of derogation from article 205quinquies, the deduction for risk capital not granted in the absence or insufficiency of profits of the taxable periods preceding the period provided in the first place;
S. 14. article 236 of the Code, repealed by the Act of January 30, 1996, was re-established in the following wording: «art.» 236 articles 205a to 205novies are applicable to taxpayers described in article 227, 2 °, for the risk capital allocated to their establishments Belgian as well as to their real property in Belgium and rights relating to such property, according to the terms and conditions determined by the King, by Decree deliberated in the Council of Ministers. » Art. 15. article 289bis, § 2, of the same Code, replaced by the law of May 4, 1999 and amended by the decrees of July 20, 2000 and July 13, 2001, is repealed.
S. 16. article 292bis of the Code, inserted by the law of 20 December 1995 and amended by the laws of May 4, 1999 and July 16, 2001, is repealed.
17. article 523 of the Code, inserted by the law of 20 December 1995 and amended by the Act of 4 May 1999, is replaced by the following provision: "article 52, 11 °, as it existed before be amended by article 3 of the law of 20 December 1995, shall continue to apply insofar as it concerns capital increases to ensure compliance with the provisions of article 8 of the law of 13 April 1995 amending the laws coordinates commercial corporations, limited liability companies existing at the time of the entry into force of this Act. » Art. 18. it is inserted into the same Code an article 528, worded as follows: «art.» 528. the provision of article 201, paragraph 5, as it has been inserted by the law of 22 June 2005 introducing a tax deduction for risk capital, does not apply with respect to investment deductions referred to in article 70, paragraph 1, granted from a tax year prior to the 2007 tax year. » Art. 19. it is inserted into the same Code an article 529 as follows: «art.» 529. the provisions of article 292 bis, as they existed prior to be repealed by the law of 22 June 2005 introducing a tax deduction for risk capital, remain applicable in relation to the tax credit which was referred to in article 289bis, § 2, as it existed prior to be repealed by the Act which has not been charged before the tax year 2007.
' TITLE III. -Code of registration fees, mortgage and registry arts. 20. in articles 115, 115 bis and 116 of the Code of registration fees, mortgage and registry, modified by the laws of July 3, 1972, March 1, 1977, August 12, 1985, and on 30 March 1994, the words "0.5 p.c." are replaced by the words "0 BW."
TITLE IV. -Entry into force art.
21. articles 2 and 19 come into force from the 2007 tax year.
Any changes from April 29, 2005, at the date of closure of the annual accounts remains without effect for the purposes of the provisions referred to in paragraph 1.
Section 20 comes into force on January 1, 2006.
Promulgate this Act, order that it be under the seal of the State and published by le Moniteur.
Given to Brussels, 22 June 2005.
ALBERT by the King: the Deputy Prime Minister and Minister of finance, D. REYNDERS the Minister of economy, energy, foreign trade and science policy, M. VERWILGHEN Scellé of the seal of the State: the Minister of Justice, Ms. L. ONKELINX _ Note (1) Parliamentary References: records of the House of representatives: 51-1778-2004/2005: No. 1: Bill.
Nos. 2 and 3: amendments.
No. 4: report.
No. 5: Text corrected by the commission.
No. 6: amendments.
No. 7: Text adopted in plenary meeting and transmitted to the Senate.
Full report: June 2, 2005.
The Senate documents: 3-1223-2004/2005: No. 1: project not referred by the Senate.