Proposition 50K1918

Projet de loi modifiant le régime des sociétés en matière d'impôts sur les revenus et instituant un système de décision anticipée en matière fiscale.

General information ¶

Submitted by

Groen Open Vld Vooruit PS | SP Ecolo MR Verhofstadt Ⅰ

Submission date

July 10, 2002

Official page

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Status

Adopted

Requirement

Simple

Subjects

direct tax corporation tax

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Discussion ¶

Dec. 6, 2002 | Plenary session (Chamber of representatives)

Full source

The commission review of the project took place on 16 July, 15 and 22 October, 12 and 13 November 2002.

In his presentation, the Minister of Finance resumed the project in the set of government initiatives aimed at reducing the fiscal and parafiscal pressure; an essential objective of the government statement, the present project of which is the last important step. Following the reduction of the tax on natural persons, after the reduction of the social burden, this reform contains specific measures focused primarily on companies whose activities have a strong impact on employment, namely SMEs.

The minister insisted on the clear signal that it is appropriate to give investors by lowering interest rates. It did not hide the need to insert the corporate tax reform into a neutral budgetary framework and to compensate, therefore, for the sharp drop in rates by modifying certain deductibilities which, precisely, were imposed over time to mitigate the excess of nominal rates.

The Minister stressed that if the proposed rate is 33%, plus the complementary crisis contribution, or 33.99%, the goal is to reach, as soon as possible, the most competitive rate of 30%. by

While the reform is extremely simple in its principle (reduction of interest rates), it is accompanied by complementary measures for SMEs.

The main one is to enable SMEs to increase their own resources by exempting some of their profits reserved for future investments. A regime that the minister hopes can continue to develop in the coming years. The Minister explains that legal certainty is a criterion as important as the rate for the company that decides to invest, hence the important part reserved by the reform to "ruling". The Minister then develops compensatory measures such as the control of false ASBLs, the control of the reduction of RDTs, the application of a 10% mobile pre-count to liquidation bonuses and the removal of the deductibility of a series of specific regional taxes. It also calls on the Regions for a different structure of their taxation, allowing in particular to avoid penalizing companies that have made significant efforts in the field of the environment. As for the pro rata temporis deduction rule on amortization, it only corresponds better to the economic reality.

The Minister emphasizes the social aspect of the project, which should have a significant impact on the creation of new jobs. As for budget neutrality, it will have to play in both directions. Thus, if the revenue of the ISOC increases because the taxable base increases under the effect of an intensification of economic activity, it will be possible to continue the reduction of nominal rates. On the other hand, if fiscal neutrality was threatened by a decrease in revenue, additional compensatory measures should be considered. The Minister is, however, convinced that this latter hypothesis will not be realized on the basis of the experience of the IPP reduction which proves that taxes can be reduced without mortgaging the public finances.

The hearing of the representative of the Court of Auditors made it possible to highlight the difficulties of the monitoring requested by the Court. Given the date of entry into force of the reform, the first report may not be submitted before the second half of 2005. It will also have to make a distinction between the evolution of revenue due to the specific measures of the reform and the share of this evolution due to fluctuations in the economic context.

In order for these analyses, hazardous by nature, not to be subject to contestation, a methodology containing concrete guidelines must be submitted to the Chamber’s Finance Committee.

According to the Minister, it is also reasonable to estimate that after 2007, any assessment will become unnecessary, given that in the meantime the starting situation will have changed considerably.

The hearing of the Chairman of the Taxation and Parafiscal Section of the Supreme Council of Finance enabled the members of the committee to recall the conclusions of the very interesting report which had been submitted to them by the Supreme Council in April 2001.

In his commentary on the conclusions of the report, the hearing president recalls that the effective corporate tax rate has gradually increased over the last ten years, as has the share of corporate tax in the domestic product. He believes, for his part, that the reduction of the ISOC nominal rate should reassure Belgian and foreign investors and, therefore, generate profits and, therefore, additional tax revenues.

by Mr. Leterme develops its accompanying proposal to extend the deduction for investments increased to immovables aimed at improving the safety of companies and goods.

He believes that this type of investment is of a preventive nature capable of generating savings by avoiding a posteriori intervention of the police. by Mr. Goyvaerts explains its proposal for a resolution with a similar objective, namely to allow independent entrepreneurs to make investments in the field of security through tax incentives.

They spoke in the general discussion. Goyvaerts, Leterme, Viseur, Peeters, Vanhoutte, Borginon, Gobert, Bourgeois and your rapporteur. It would be extremely boring to report here on these interventions, some of which were very detailed. I will try to briefly address the main topics of the concerns raised by the speakers and I will allow myself to refer to the report for more details.

Several speakers welcomed the significant drop in the ISOC rate, acknowledging the positive effect of the measure on both Belgian and foreign investors. Others pointed out that, given the objective of budget neutrality, the project does not reduce the tax pressure on companies and merely operates slides between companies. The same insurge against ⁇ ining the complementary crisis contribution for companies while the government has abolished it for individuals.

Speakers were almost unanimous in appreciating the particular effort made in favour of SMEs, although some believe that additional self-financing efforts should have been made. However, there have been many criticisms about certain compensation measures.

The non-deductibility of certain regional taxes has attracted the attention of all stakeholders. Some believed that the measure would further disadvantage the Flemish Region. Others questioned the concrete scope of the measure and asked to clarify the concept.

While the principle of imposing a 10% rate on liquidation bonuses has not been challenged, on the other hand, the date of its entry into force, qualified by several speakers as retroactive, has been heavily criticized. Two speakers believe that the pro rata temporis amortization rule, which the government wanted to exclude SMEs, will pose a practical problem in determining whether or not the company benefits from the reduced rate criterion. One speaker believes that the government should have taken more into account the favorable economic effects of certain proposed measures, rather than focusing on fiscal neutrality.

The development of the “decision” met with the support of most speakers. One speaker, however, warns of the legal risk of a too extensive use of this procedure. Some speakers regret that the project does not meet the simplification objective announced by the government and even consider that it increases the complexity of legislation. One speaker insists on the need for better effective control of companies and considers the three-year taxation period too short. Another speaker welcomes the respect for fiscal neutrality that should enable the government to finance many needs of companies. He regrets that the government has not seized the opportunity to revise the tax system, which he considers too advantageous, of corporate cars and intercommunal energy companies.

Several speakers conclude that the project represents an important step in the right direction and support the Minister’s declaration of intent to go further in the easing, as soon as the budget margins allow it.

I would like to refer to the written report regarding the discussion of the articles. I will, however, raise an amendment concerning the deductibility of investments in early childcare places, which has ⁇ attracted the attention of the members. All recognized the importance of the issue and the minister committed to proposing a solution after consultation with the communities.

The proposal was approved by 9 votes and 2 abstentions.

This report is brief and concise!

Mr. Peterson, you are actually the first speaker registered. But can I ask you to let Mrs. Moerman come forward? Ms. Moerman has a problem with timing around 11 o’clock. Do you have objections to that?

Not at all, Mr President.

The gallantry of the Hallenars is a symbol for all saints and other women.

Mr. Speaker, Mr. Minister, I thank you, colleagues, for your gallery after this much too short night. It’s been six hours since we walked out here.

As regards the corporate tax reform, the federal government agreement announced that the government would follow the existing international trend of reducing the nominal rates within a budgetarily neutral framework. The basic tax rate would be reduced, offset by a reduction in withdrawal opportunities. In that context, the tax status of SMEs, and in particular that of the smallest enterprises, would be upgraded in order to stimulate investment with own resources.

One of the pistes that the government wanted to investigate in accordance with the government agreement was, under certain conditions, to exempt a part of the profit intended for investment from corporate tax.

The deductibility of certain undisputed costs should also be gradually expanded. Well, the draft law on corporate tax reform that is being discussed today fully meets this provision. By reducing the tax rate and by abolishing certain tax deductions, we will undoubtedly evolve into a tax system that exercises less influence on economic choices and that makes these choices more dependent on fundamental determining factors such as, for example, the return of the invested capital for taxes. In this way, the fiscal policy enables the market economy to better develop its potential, as the allocation of resources, which is motivated by purely fiscal considerations, is ineffective because it is not market-compliant. The expansion of the taxable basis not only makes it possible to meet a neutrality objective, but it can also contribute to making taxes more equitable.

However, the main reason why the government wanted to put this ambitious corporate tax reform on the threshold is reflected in a report from the High Council of Finance in April 2001. In fact, that report showed that the tax pressure, which weighs on companies in our country, is similar to the pressure that we find in the main neighboring countries around us, but that our country suffers under a nominal rate that is significantly higher than the average. In other words, at first glance, we are doing this badly. There is no need to argue that the differences in those nominal rate rates affect the choice of economic actors with regard to the localization of investments. A choice that, as mentioned, is not market-compliant.

Finally, the Council of Ministers of 5 July 2002 endorsed the draft law concerning the reform of the corporate tax, the strengths of which I will present in short hereafter, but which have already been detailed by the reporter, Mr. van Weddingen, whom I thank for his detailed report. The reform will reduce the current total tariff rate from 40.17% to 33.99%. This means a new nominal rate of 33%, increased by the additional crisis contribution. Their

As is known, the corporate tax reform had to take place in a budget-neutral framework. This means that the various tax expenditure will need to be reduced and that, in addition, certain anomalies in the current system will need to be addressed. One of the compensation measures provided for is, for example, the exclusion of the possibility of accounting for the part of the profits resulting from abnormal or benign benefits, which are extended to the losses of the year itself. The conditions for applying the DBI system — the final taxed income — will become stricter. A moving advance tax of 10% will be imposed on the liquidation bonuses in the event that a company buys its own shares or in the case of the entire or partial distribution of the corporate assets. For the companies, some deductions will be revised or modified. This will be the case, among other things, with the depreciation rules. The companies will also no longer be able to deduct the taxes they pay to the regions, but that rule will then apply again to the own taxation of the regions and therefore not to the regional taxes listed in Article 3 of the Special Financing Act. The fight will also be intensified against the abuses of legal personality and against practices established in particular by cash-money companies. Their

Other measures that are possible without legislative changes will also be taken. For example, the Administration will ensure that non-profit associations are better controlled and that the control of the application conditions for the deduction of DBIs is strengthened.

Finally, there are several temporary measures that will soon expire. These concern a number of purely technical matters: the exemption from corporate tax of AFV shares, measures adopted to promote innovation capital and measures adopted to promote industrial reconversion.

The VLD is very well aware of the fact that a number of these compensatory measures have sparked criticism from a number of economic actors. This is the case, for example, for the removal of the deductibility of some regional taxes in the corporate tax, as well as for the introduction of a 10% mobile advance duty on the liquidation bonuses. However, the first measure, the removal of the deductibility of some regional taxes in the corporate tax, can be justified on the basis of a number of arguments. Their

First, allowing these taxes, duties and remunerations to be deducted from the profits taxable in the company tax would reduce the ultimate effect of these duties and therefore be of such nature that the effectiveness of the tax instruments adopted on an autonomous level by the regions in the exercise of their own material powers would be disrupted or at least crossed. Their

Second, if the Provinces have more tax autonomy and use their newly acquired rights to increase taxes while those taxes in the corporate tax would remain deductible taxes, then the Provinces would actually be able to greatly influence the size of the taxable base in the corporate tax without the federal government being able to do anything about it through their own fiscal policies.

By making the regional taxes no longer deductible, it seems to be erecting a dividing wall between the federal and regional fiscal policies. Now, I am also aware that in certain sectors of the economy this has a proportionally greater impact than in other sectors. Think about the textile industry and the laundry industry. But then it is up to the regional government – if it considers it necessary within the framework of its own autonomous policy – to take the necessary compensatory measures there.

Furthermore, since in principle all income is subject to taxation, the introduction of a 10% tax on liquidation bonuses can be considered normal. Compared to the rate applicable to dividends, this is a fairly low rate.

Furthermore, the VLD is ⁇ satisfied with the measures proposed to benefit small and medium-sized enterprises. The 28% rate applicable to those companies is reduced to 24.25%, excluding the additional crisis contribution. Auto-financing of companies will be encouraged by allowing exemptions in favor of the reserved profits. Small and medium-sized enterprises will also be exempt from tax increases if no or insufficient advance payments have been made during the first three financial years following the establishment.

The VLD is very pleased that the proposed reform has a very high – what one could call – SMO content and that SMEs are still spared from some of the initially proposed compensatory measures. For example, the government — and fortunately but — has withdrawn from its original proposal to limit the deductible of fuel costs to 90%.

Furthermore, the measures on depreciation will not apply to SMEs.

The VLD is convinced that SMEs will be able to properly use this oxygen to continue to fulfill their role as providers of prosperity.

Finally, the Flemish Liberals and Democrats are also pleased that the government is taking advantage of the opportunity to introduce a robust system of preliminary decisions in tax matters and that it allows fiscal consolidation for domestic companies. Both measures will benefit not only the fairness but also the neutrality and transparency of the tax system.

The VLD is also convinced that the present draft law addresses the important concern to reduce the tax pressure on companies, and thus in an international context.

We call on the government to continue on the path of tax reduction.

What do we specifically urge? Well, in fact, it is a pity, Mr. Minister — it has been said so many times in the committee but I would like to repeat it again — that the additional crisis tax on companies has not disappeared. A few years ago, we stopped the gradual abolition of the crisis tax on individuals, but we failed to do the same for the companies. And even though I hear somebody mumbling that it is a crisis again, there are different ways to address it.

First and foremost, we must examine how long the less favourable economic situation will last. Even if one can qualify this as such, then still the question is how to get the best out of that difficult situation. Is it because of the companies – which must be the engine of the economic stimulus and which must make us get out of the economic downturn – to add a crisis tax or, on the contrary, by giving them breathing space?

We are already opting for the latter and would still like to advocate to eventually abolish that additional crisis tax as well. How should we have the money for this? That is, of course, the general concern with any tax reduction. Well, if there are returning effects of the proposed measure which we would not have yet taken into account in the budgetary cost sheet, we would ask that they be used primarily for the abolition of the crisis tax and – if it is still possible – for a further reduction of the nominal rate.

Mr. Speaker, Mr. Minister, colleagues, I thank you for your attention.

Mr. Speaker, Mr. Minister, colleagues, first of all, I would like to congratulate my colleague from Weddingen, the reporter, and the services for their excellent report and for the good summary you have provided. I understand perfectly that you refer to the written report for the articles because otherwise it would effectively become a long story and it is not intended to talk here all about what has already happened in the committee. First, I would ⁇ acknowledge that the draft addresses a major concern – as Ms. Moerman just said – to take effective steps toward a better tax regime for our companies. But between recognizing that and waving the trumpet for this reform is still a step too far. I have the impression that the fact that so few colleagues are present today may prove that many colleagues realize that this is not such an extraordinary reform. Of course, yesterday it turned out that the issue of tobacco advertising is much more important, to the extent that it has been fully discussed here for 6 hours, and that this debate will have to continue even next week. A full assembly for six hours, while we are here now with a few people to discuss this reform. I assume that this effectively translates that there is an understanding among colleagues of the true attraction of this design, because it is not a major reform. Let’s be honest, it is mainly a rearrangement. A number of rates are facally reduced but effectively, on average, nothing changes. This is related to budget neutrality. Finally, and most of all, I will discuss this during the continuation of my presentation, the promised administrative simplification does not come in at all, quite the opposite. Because of this draft, this reform only makes the system much more complicated. In the long run, it is expected that accountants and fiscalists will benefit more from the reform than small and medium-sized enterprises. I will look for the red thread of administrative simplification in this plan.First, I would like to pause a moment on the measures that cost money to the Treasury and then, in a second loop, we can then discuss the measures to compensate for that. The main measure that costs money to the Treasury is, of course, the reduction of the rate. The reduction of corporate tax rates from 40.17% to 33.99% is obviously a good thing for everyone. The increasingly reduced tax rate for SMEs is also falling from 41% to 34.5% and from 28% to 24.25%. However, it is a mistake to think that it would be a reduction in the tax burden, let alone a reduction in the burden. This is because the implicit neutrality requires compensatory measures that leave the effective pressure unchanged. In addition, the Government provides an additional €30 million in revenues to its budget by increasing the cost of filing the annual accounts. This point is not part of this draft. This is a separate measure that must be taken into account. These costs will have to be paid by the companies. Thus, they do not contribute to the budget-neutral framework of this so-called reform. If this measure is taken into account, we can conclude that on average companies will have to pay no less but more. Only they will not notice at first sight. If we look closer, in particular to the measure in favour of SMEs, we can only see that under blue-red-green the complexity of corporate taxation has increased. In addition to the reduction of rates, an investment reserve will be introduced and no tax increase will be applied in the first three years after establishment due to no or insufficient advance payments. These measures apply only to SMEs, which are those companies eligible for a reduced rate. As the State Council correctly notes, this criterion has nothing to do with a small or medium-sized enterprise. Year after year, you must decide whether you are eligible for the reduced rate. Long-term planning is therefore almost impossible.In addition, you may lose the application of the reduced rate years after closing your financial year as a result of an audit. That is a very essential point. I don't know if the minister still hears that, but the rejection of a few euros of costs may already be enough. Not only does the company lose the right to the reduced rising rate. As a result of this so-called tax reform, in that case, the company will have to anticipate the deductions, deduct the additional costs at the same rate as the principal, recalculate the investment deduction, lose the right to the investment reserve, no longer be entitled to a tax credit, receive a reduction due to insufficient advance payments, and possibly be imposed a 10% tax increase due to incorrect declaration. Therefore, any legal certainty in the hands of SMEs is sought. The fiscal control is afraid. If you enjoy too many of these benefits, the tax account will be significant. I would like to say the following about the investment reserve. The investment reserve aims to strengthen the equity of SMEs by securing profits. This measure should address the financing problem of SMEs. The return on the investment reserve consists in the deferred payment of tax on the profit that is reserved. The investment reserve was introduced in 1981 and replaced by the investment deduction in 1982, together with three other measures. Compared to 1981, the economic context has changed substantially.Delaying the payment of your taxes leads to an inflation rate of 14% more than a current inflation rate of 2% to 3%. Today it is a small income. You can reserve up to 37,500 euros. Thus, the yield, taking into account an inflation of for example 2.5%, amounts to a maximum of 227.34 euros to 323.44 euros per year. Your accountant and your tax consultant will ⁇ cost you more in the first few years than the investment reserve. Of course, we also understand that the government wants to prevent the misuse of the investment reserve to omit or dismantle the necessary funding of a equity company. Therefore, the new measure provides that, on the one hand, the reduction in the deposited capital should be deducted from the profit to be reserved and, on the other hand, the increase in the claim to shareholders. However, it is still not clear to us why the weighted average of the reduction in deposited capital between the last financial year in which the investment reserve was applied and the new financial year should be taken into account in its calculation. Such calculations are only beneficial for the accountant’s or the tax consultant’s wallet. The concept of claims to shareholders is not specified further. This results in a drastic reduction in the reserveable profit in a capital increase. It should be clear that the investment reserve is more a gift for the accountant or tax consultant than for the SMEs themselves. In the committee we have proposed an alternative. Either you want to encourage the self-financing of the SMEs, or the investments. These are two different goals. The CD&V advocates the conversion of the investment reserve into a real auto-financing reserve without investment obligation. The blue-red-green investment reserve essentially has the character of an additional distributed investment deduction under the condition to reserve profit. If the government had an investment goal in mind, it could have raised the percentages of the investment withdrawal more easily. Or it would have been better to make a real auto finance reserve, as we suggest. The idea of administrative simplification is far-reaching in this new measure. We can only state that in addition to the known investment deduction and the spread taxation surplus value, two new measures have been added in this legislature that impose an investment obligation. These are the investment reserve and exemption from value added on commercial vehicles. Just let your tax consultant find out whether you can combine this measure and which one can ultimately make the most. As a company, you will have to plan more. In the first three years after the establishment of the company, the company is not required to pay any tax increase due to no or insufficient advance payment. We already have a similar policy in the tax system. If you want to start an activity, you will have to choose. Are you going to pursue your activity as a natural person subject to personal tax for three years and then place the case in a company? Specialists are also needed to figure it out. All preferential measures are linked to the application of the reduced rate. Due to the conditions associated with this, you can sometimes face a very unpleasant tax surprise during a tax check. We come to the measures that should ensure budget neutrality, the compensation for this preferential measure. The reduction will have to be offset by a number of measures to guarantee budget neutrality. Much has already been said about this. As long as the introduction of a system of data mining on VAT is accompanied to ⁇ fiscal neutrality, we do not believe in it. Neutrality does not depend only on corporate income. For CD&V, the rate reduction does not have to be completely neutral. It must be clear that for those who desire this neutrality — I look especially at the colleagues of the PS, SP.A, Ecolo and Agalev — that the whole system set up through monitoring by the Court is a beautiful package with which they have been packed. For us, the non-deductibility of regional taxes, environmental taxes and remunerations with the exception of incorrect regional taxes is unacceptable. The deflation of the rate reduction in corporate tax mainly on 1 District for 96.7 million euros or 8% is following us a violation of federal loyalty. Rather, the introduction of such a measure fits into a round of state reform where the financing of the regions can be discussed. The deductibility of the environmental tax is ⁇ difficult for the Flemish laundry and textile sector. It can be summed up as follows: you can wash whiter than white but not without water. Environmental taxes cannot be avoided by these sectors. We will therefore, colleagues, submit our amendment again in this regard so that the Flemish parties will also have to acknowledge this in the plenary session. I suggest them then to read what was stated on the subject by the Flemish parties in the Flemish Parliament. Another point is the introduction of the 10% mobile advance tax on purchase and liquidation bonuses. We believe this makes sense when we consider reducing the rate to 33.99%. The final tax pressure on future profits is 40.59%. The previous rate was 40.17%. A small difference that therefore indicates an increase rather than a decrease in the tax pressure. The introduction of a tax on the liquidation bonuses clearly shows that the entire rearrangement is a fractional tax increase for the future. In addition, it is a pure tax increase for the many self-employed persons who carry out their activity in the form of a company. For them, the reserves are a supplement to their limited pension. The mobile advance tax on the reserves already taxed at 40.17% is a net tax increase for these self-employed to 46.153%. Transitional provisions that do not take this into account are therefore strongly criticized. The Minister’s argument that it is an improper use is, as the Council of State correctly notes, invalid. The legislator – at that time in 1991 we were there as CVP – has explicitly provided for an exemption so that there cannot be any misuse. Consequently, the retroactive legal effect until 1 January 2002 undermines any form of legal certainty. In addition, the practice will show that there will be many problems when buying own shares. A liquidation tax on the head of the companies instead of a mobile advance tax can avoid these problems. This measure will amount to 123.9 million euros or 10.4%. We will also submit our amendment to repeal retroactivity again to the plenary, so that you, colleagues, must again take a stand on it. The return from the non-drawability of the losses of the current financial year of abnormal or beneficial benefits is estimated at EUR 62 million or 5.1%. Until now, the law permitted the compensation of losses incurred by domestic group companies with profits achieved by other entities in the group provided that an asset shift resulted from the granting of abnormal or beneficial benefits. It is unreliable to announce a tax consolidation, which also aims at a tax loss account within group companies, and at the same time to propose this measure as if it contributed to the neutrality of this reform. We would politically abolish the non-deductibility of these losses from abnormal or beneficial measures once fiscal consolidation is introduced. The proportion of the initial deduction annuity for large companies has a logical economic background. On the other hand, pro rata per day is anything but an administrative simplification. The Minister states that these companies carry out an accounting in which everything can be processed. However, when you have to book many thousands of invoices, this remains an additional burden. You may ask yourself what the return is when an auditor accepts a day less of deductions. We can approve this measure provided that pro rata per calendar month. The revenue for this measure is estimated at 525,5 million euros, or 43.9% of the total. We have also already said that SMEs may face unpleasant surprises as the prorating depends on the application of the reduced rate. The rejection of a few euros of legal costs may result in the loss of the reduced rate. Years after the booking, accountants and tax professionals will have to look at the invoices one by one in the hope of still being able to prove the day on which the asset was purchased or manufactured. We have also, to our surprise and ⁇ to our regret, found that there was no majority in the committee for the approval of the annexed legislative proposal on increased investment deduction for security investment. This was rejected in the committee. We will also submit this amendment again at this plenary session. These are the three amendments, Mr. Speaker, which we are submitting and which I will no longer need to explain later in the article-by-article discussion, since I have already mentioned their existence here. In summary, we can remember the following. Globally, ⁇ will pay more on average than before despite a lower tax rate. The non-deductibility of regional taxes, environmental taxes and remunerations is a disproportionate distribution of the burden of the tariff reduction on the shoulders of Flemish companies. The administrative simplification on the fiscal level is a promise that is not fulfilled at all in this legislature. The loss of the application of the reduced corporate tax rate also means the loss of all the benefits that this government grants to SMEs. This increases corporate tax uncertainty. A thorough tax planning is needed. Accountants, accountants and tax consultants have never had as much work as they do now. This will also cost companies a lot. The introduction of the mobile charge on the liquidation bonuses undermines any form of legal certainty. It is a pure tax increase on all the taxable reserves that the small ⁇ have accumulated in previous years in addition to their low pension.Given these important criticisms, I can already announce that our group will abstain at the final vote unless our three amendments are still approved.

Mr. Speaker, the present draft on the corporate tax reform is again a file with a typical purple-green decision-making process. That is to say, this is a file that has ⁇ half a dozen times announced that there was an agreement, but also half a dozen times proved that there is no agreement. I would immediately add that, in principle, no one can be opposed to tax cuts, even in the case of companies, but then we must see this apart from the budgetary context. We know that it is currently far from pink, and the Planning Bureau made it clear two weeks ago by stating that there is no budgetary space for 2003. We must also separate this from the fact of who will now in fact be the winners and losers of this reform.

Likewise, I must point out — which is, however, contrary to the personal tax — that this is a tax reduction that ⁇ does not bring less money, but on the contrary, more money into the state treasury. By the way, it was on 26 April 2001 — which is a long time ago, Mr. Minister — that the then chief of cabinet of the Prime Minister, Mr. Coene, launched the announcement that the nominal rate of corporate tax would fall to 34% and this more or less to the great surprise of your own advisors. The number of 34% was also rather surprising, because the Prime Minister had spoken about the number of 30% during a number of foreign trips, including in Japan. But due to internal disagreement with the red-green coalition partners, this has been reversed and consequently the expectations have been slightly tempered. One thing is certain, colleagues: a rate of 34% or, more correctly, 33% plus 3% crisis contribution — which, in short and silently, has not been abolished, probably because we are in a crisis situation again in the meantime — puts us in an average position compared to the other EU Member States. If, on the other hand, we take into account the measures that our neighbors have already taken in recent years, a tariff reduction to 30% would be more appropriate.

Now, in any case, it was in April 2001, i.e. about five months before the catastrophic date of September 11, Mr. Minister, that in the government or at least yet among the liberals had grown the understanding that, already then, the competitive position in relation to the neighboring countries had deteriorated. In the OECD ranking, the Belgian tariff is at the top, along with Italy. Consequently, this indicator is a ⁇ bad signal for foreign companies and investors. In doing so, this country should, in my opinion, not so much position itself in relation to economic giants such as Germany, France and Great Britain, but rather in relation to the smaller countries such as the Netherlands, Ireland, Luxembourg, Finland and even Switzerland, because they also try to attract the same investors.

That foreign investment is not going well, the figures prove. I will give a brief overview. In 1998 we knew 132 foreign investors, in 1999 109, in 2000 111 and in 2001 this number had already fallen to 90. What the number will be in 2002 I do not know, but I still have a strong suspicion that it will again be a lower number.

In accordance with the government agreement, the corporate tax reform should not cost the state treasury any franc or, more precisely, no euro. It should be a budgetary vest-sack shoe operation. By saying this, of course, the beneficial effect of a tariff reduction on the economy is immediately overthrown. The question, of course, is: what about those return effects that are normally associated with any tax reduction? Mr. Minister, in a radio interview on the RTBF somewhere in June 2001, you said, I quote: "The reduction of the rate must only be partially compensated, because there will also be returns effects." You even added that a third of the reduction would be paid by the government.

This is somewhat to the great dissatisfaction of your coalition partner, the Socialist Party, by Laurette Onkelinx, who believed that the tax surpluses should be used primarily for social reform.

The logical question then is whether this rate is not a false symbol. Because, if the budgetary neutrality must be enforced and if the rate falls, then globally speaking the taxable basis must rise. In other words, then the profit amount of the companies to which this rate applies must increase. In the light of the current low-cost economy, this is now the big demand.

The proposed reduction of the rate will be accompanied by a limitation of a number of deduction points. The Flemish Bloc is of the opinion that the current withdrawal options should be evaluated on the basis of their substantial merits and not on the basis of short-term budgetary considerations. This should be due to the fact that the investment deduction for the Flemish companies is and remains an important tax instrument. It is therefore absolutely necessary to avoid affecting SMEs by removing certain professional costs, such as the deduction of regional taxes.

Therefore, in my opinion, there is a condition linked to the introduction of a lower corporate tax rate. There should have been consultation with the undertakings or their representatives through trade unions and the like, so that there was a consensus to avoid structural damage to one type of undertaking in a given sector.

On the other hand, calculations show that the tariff reduction to 34% would cost approximately 48 billion Belgian francs or 1.2 billion euros. Due to this budgetary neutrality, this amount should be recovered through an à la belge solution with the intention not to target a single type of business. That is indeed the starting point. Whether this is true in reality is still the question.

What measures were taken or are now linked to the reduction of the rate? I am summing up a few.

A first measure is the introduction of a mobile advance duty — although with retroactive effect from 1 January 2002 — of 10% on the liquidation bonuses realised by a company, for example when purchasing its own shares or when allocating or partly distributing the social assets. A measure that should bring about 6 billion Belgian francs or 125 million euros to the state treasury.

A second measure is the amendment of the depreciation rules, again a measure that must flow 478 million euros or 19 billion Belgian francs to the state treasury.

A third measure is the change of the direct taxable income or rules for income from abroad, again a measure that must bring 325 million euros or 13 billion Belgian francs. Anyone who has read the commentary on the DBIs in the field literature has probably also found that there are more than strong doubts about these earnings. One claims that this is slightly exaggerated, the other even says that this measure threatens to cost money. As regards those costs, it is therefore referred to the fact that for these measures, the tax administration will have to make considerable efforts to only develop the control apparatus or control mechanism to control this measure.

A fourth measure, the non-deductibility of the own regional taxes, which should bring about 4 billion Belgian francs or 100 million euros, is in particular the environmental taxation, the non-deductibility of the environmental taxation and the vacancy tax. Mr. Minister, it is precisely that non-retractability of the own regional taxes, such as the environmental taxes, that puts bad blood in Flanders because it makes the environment more expensive from a fiscal point of view. Apparently, there is no law at the Belgian level that can be passed without a certain community add-on under the grass. This bill shows this once again.

Of the total of 250 million euros in environmental taxes, 220 million today come from Flanders, or about 90%. Consequently, the estimation of the environmental tax is borne by the Flemish companies. It is exactly one SME sector, that of the Federation of Textile Care that groups around 800 laundry and steamers, which draws the hardest at the bell. They calculated that the reform would cost companies 24% more taxes. Reduction of burden and additional competitive disadvantages.

Generally speaking, it is always nice for policymakers to implement a tax reduction. If the reduction for each includes something wils, of course everyone is happy. On the contrary, implementing a budget-neutral tax reduction is a calvary journey because such an exercise always brings winners and losers: what one category of taxpayers gets is recovered from another category. The greater the share of the profit will be in the total income, the greater the tax savings will be. But if the company makes little profit and has quite a bit of cost, it will pay more taxes than before. Consequently, for them, the fiscal pressure rises, again causing one of the many purple-green creeds to crumble. The conclusion of the story: those companies that do not make a lot of profit will pay for those companies that do a lot of profit.

Now that we are talking about tax pressure, I would like to point out the following. When we look at the figures of the Trends Top 5000 that will be published soon, we see clearly confirmed that the tax pressure on companies continues to rise. Despite all the plans and measures taken so far by this government, the companies continue to stiff the national treasury. The figures show very clearly that 62% of the 50 largest taxpayers have a tax burden above 40%. In order to ease the fiscal pressure, your corporate tax reform is not too early.

No matter how we turn it or turn it, this tariff reduction — the first since the 1990s — is an absolute necessity for the Flemish companies, especially since in recent years the other European Member States, for example Germany, have also systematically reduced their tariffs. Britain and Ireland are still doing better with only 10 percent.

The reduction of corporate tax is mainly due to perception. That reduction must then in fact have a signal function for foreign investors and consequently this corporate tax reduction of 34% means a design with a high psychological content. Moreover, it is very much the question of who will be the winners and losers: what one category of companies will receive and which category of companies will have to issue.

In conclusion, Mr. Speaker, this reform is undoubtedly containing a number of positive elements, but in addition there are also a number of foot angels and rifles. We will therefore abstain from voting.

Finally, Mr. Speaker, I would like to devote a few words to the proposal for a resolution submitted by my colleagues Bultinck and D'haeseleer and by myself on tax incentives for investment in security by self-employed undertakings. This issue is still up to date, Mr. Minister. The list of rams is getting a little longer each week. There has also been a wreck again tonight, in Turnhout if I am not mistaken. The modal middle class is gradually becoming desperate about this. The measures taken so far are considered to be largely insufficient. I refer to the famous police reform. It has not yet produced any tangible results in this regard. If, of course, the government fails to guarantee the right to safety, we should not be surprised that citizens defend their families and their property themselves.

Although various governments are already encouraging environmentally friendly and energy-saving measures, this is still not the case for investment in safety. This means that the entrepreneurs themselves must commit to the preventive security of their case.

Now is the time for fiscal measures to be taken to boost security investments.

Mr. Minister, we therefore regret that in the context of this corporate tax reform the government did not have the courage to take some concrete fiscal measures or provide tax incentives in the area of security investments for self-employed.

Mr. Speaker, Mr. Minister, dear colleagues, we are therefore brought to share our reflections on the bill that reforms the corporate tax and develops the practice of tax ruling. In view of the prevailing situation in other European countries, in accordance with the Government Agreement, a number of principles were thus adopted in order to improve Belgium’s position in the field of corporate taxation.

It was therefore decided, in a neutral budgetary framework, to follow the international trend favourable to the reduction of nominal tariffs. by

Our group has firmly insisted that the reduction of the tax rate should be offset by the reduction of the number of deductions. I will return, in a few moments, to this principle of budget neutrality which is essential in the eyes of the Socialist Group.

It was ⁇ important to correct the observable fiscal imbalance between the different sectors of the economy and to place Belgium in the European average of tax rates. Thus, the nominal tax rate, i.e. the official rate, visible to potential investors, was very high compared to other European countries. But alongside this high official rate, it was possible to benefit from numerous tax deductions that eventually decreased the tax due.

The effective tax rate, i.e. the rate actually paid by companies, was significantly lower than the nominal rate, i.e. the official rate, and was within the average of the European effective tax rates. In other words, the tax actually paid by companies in Belgium was in the average of that applied by our main business partners.

All this has made the corporate income tax scheme very unreadable and unattractive for potential investors. This lack of readability should be corrected. Thus, it was essential for the international legibility of our country to follow the European trend of declining nominal rates, while expanding the taxable base of the ISOC in order to respect the principle of fiscal neutrality.

In addition, tax simplification is a privileged way to minimize both the costs of tax administration and the administrative costs it generates for taxpayers. It also reduces the possibility of tax evasion.

In this context, I would like to recall that the Higher Council of Finance stated in its opinion on this reform that it is necessary to take into account the administrative cost of the tax and the costs it generates for taxpayers. The administration must thus ensure that corporate tax is established and controlled in an efficient and cost-effective manner. The legislature, on the other hand, must prevent companies from spending too many resources to fulfill their tax obligations.

Let me now briefly comment on the measures that reform the corporate tax.

First, it was decided to reduce the nominal corporate tax rate from 40.17% to 33.99%. Secondly, a set of measures is specifically aimed at SMEs, which will reduce their rate from 28% to 24.25%, excluding additional crisis contribution.

In addition to this rate reduction, SMEs will benefit from several favourable measures that we have fought for. Thus, self-financing of companies will be encouraged through an exemption in favour of profits put in reserve, also thanks to a lack of majoration that was instituted in the absence or insufficiency of advance payments.

In order to budgetally offset the reduction in revenue involving the reduction of interest rates, a number of compensatory measures have been developed.

The retention of a 10% mobile pre-account on liquidation bonuses and a reinforcement of the conditions for deduction of taxed dividends were introduced.

Furthermore, the system of indirect transfer of profits will be strengthened in order to prevent profits being artificially transferred between companies in order to compensate for previous losses at the expense of the Treasury. by

An effort will be made to combat abuse of legal persons, whether commercial companies or ASBLs, and also against large-scale tax fraud.

It is planned that the budget neutrality – I will then return to it – of these measures will be verified through a monitoring of the evolution of the income of the ISOC, monitoring carried out by the Court of Auditors. I would like to insist on the Government that it communicates to the Court of Auditors all the information necessary for this monitoring to be carried out in the best possible way. by

The tax ruling is a preliminary agreement that the tax administration and a company sign together in order to fix the amount of the tax due and to certify it for a certain period. It will provide legal certainty on the taxes to be paid: the guarantee that companies who use it will not be concerned as long as they comply with the terms of the contract. by

In the head of the administration, the tax ruling will reduce the litigation related to the interpretation of tax legislation. by

I applaud the establishment of this instrument, which is part of modern taxation and which meets the desire for legal certainty of many companies. In this context, I would like to ask Mr. The Minister of Finance, in the interest of parliamentary control, to have a presentation of this new decision-making mechanism, which is expected to have impacts in terms of investments.

Finally, I would like to emphasize, Mr. Minister, dear colleagues, that the most prominent form of inequality in tax matters is the difference in taxation between labor income and capital income. Our group is of the opinion that the taxation of capital income should also be reformed. Finally, we must not lose sight of the fact that the analysis of the tax structure must be done by integrating the socio-economic structure of our country and the use of tax revenues. It is, in fact, the way in which revenue is used, and therefore the structure of expenditure, that will ultimately determine whether the different taxes are collected for the purposes of fairness and efficiency. by

The consideration of our social protection system or the quality of public services cannot be dissociated from the analysis of the tax structure.

Mr. Speaker, Mr. Minister, Mr. Colleagues, this proposed corporate tax reform was part of the Government Agreement of 1999. by

Two parts were clearly planned in this device. First of all, a drop in the marginal rate, which is really important for the image of our country, for companies that want to invest and who make their fiscal shopping in order to look for the place where, on the face level, the rate is the lowest. Subsequently, it was planned that this reduction of the rate should take place in a budgetally neutral framework, that is, that the corporate tax revenue must be preserved. The reason for this is very simple: the financing needs for public policies are very many. I think here of a number of needs that are only partially met so far; it is, of course, the raising of the social minimum but also the problem of health care, the fund of food claims and the creation of a tobacco fund, for example, or even the refinancing of the SNCB. by

All this therefore largely justifies the need to lower taxes in a budgetally neutral framework. by

If the tax is reduced by ensuring to remain in a neutral framework, compensatory measures must be taken. These are many and varied. I will not come back in detail on this subject. They have been the subject of numerous debates and numerous arbitrations in order to reach a political agreement. I would like to point out a few of them. by

First, the RDT regime, the income definitively taxed. In this regard, we are moving towards more equity. Indeed, from now on, as soon as the project is implemented, it will take into account the duration, as well as a minimum threshold of detention. It will also be appropriate that income has actually been taxed abroad. In the current regime, some interpretations of this arrangement are subject to laxism and if one can admit that one does not actually tax the same income twice, one must ensure that it has actually been taxed in the country of origin. We also endorse all measures to combat abuse, whether it is abuse of legal personality or abuse of liquidity companies. We consider the decision to end the deductibility of certain regional taxes excellent. There is, in fact, no reason for the federal authority to charge, through tax deductions, the regional taxes that are paid by companies. by

We also support new measures, such as the imposition on the mobile pre-account of liquidation vouchers, as well as the modification of the methods of amortization, although in this particular case, it seems to us that this is more of a time-sharing rather than a real measure of compensation, but only the future will tell. by

On the other hand, there is a compensation measure that we would have liked to include in the project: a reform of the tax regime for corporate cars. In our view, there are at least three reasons to change their tax regime. by

First, it is a natural benefit, a surcharge, which is not subject to tax and which, at the same time, does not generate income in terms of social contributions. Also, the loss is double: in terms of tax and in terms of social contributions. However, you are not without knowing that social security needs additional revenue, since alternative ways of financing are being sought. by

Second, the problem is global. This concerns a large number of cars. The latest statistics show that about 50% of new registrations are, in fact, corporate cars. This is far from being negligible. In terms of mobility, here is a public, which is quite captive of the car. How do you want those frames, who are given a car to move, to opt for an alternative mode of transport? In other words, how do you want to encourage them to take the train since they get a car?

Third, more symbolically, what is actually happening in companies? Whenever the frame rises into the scale of the company, it receives an increasingly large, increasingly efficient, increasingly expensive car. by

So there is a very clear association between, on the one hand, social and professional success and, on the other hand, the cylinder, the power and the price of the car. It is an association that we find very incompatible with the idea we make of social success.

At the level of SMEs, we are pleased that we have taken, in this project, a number of tax measures that are in their favour. Small and medium-sized enterprises, it has been said and repeated, are really the constituent element of our economic fabric. They promote often endogenous production, they promote local resources, they most often create sustainable jobs; there is therefore every reason to favor them on the fiscal level.

Respecting this budget neutrality is obviously a major political problem to be raised. How to validate it? How to check it? We thought — and this is part of the inventive character of this government — that the Court of Auditors, competent body, independent and collateral body of our parliament, could very well assure this control role. If I am not mistaken, I think it is a first to associate an organ such as this with the control of a tax measure. There may have been precedents. I think mr. The minister is more nuanced and will respond to that. But that is not the main thing.

So, here is a quite interesting device, which we will follow the implementation with interest and vigilance.

With regard to preliminary decisions and rulings, I believe that, too, we are going toward more legal certainty for companies since there will really be preliminary negotiations that cannot, in any case, be derogatory to the Code of the Income Tax. Therefore, there is no question of making favors that are not registered in the CIR 1992. Furthermore, the transparency of decisions is also increased, since all of these decisions will be published anonymously, this is of course, and report will be made annually to Parliament.

To conclude, everyone was able to realize, by following the media, by following the negotiations, that the political agreement on the corporate tax reform had not been easy to reach. But the important thing is that a global balance is now ensured within this project. What is balance, ultimately? This is because, on the one hand, we position ourselves as a showcase a little more attractive for foreign investors but on the other hand, we keep the maximum of tax revenues to carry out sustainable and solidary public policies.

Dear colleagues, I have counted. This is the fourth large-scale tax bill voted in a committee without a single vote against! If a Guinness Book of Taxation existed, the Minister could be included in it!

The project you submit to us represents the last major part of a magistral tax work announced by the government agreement, when it stated the need for a gradual reduction of the tax pressure throughout the legislature. After the indexation of the barems, after the abolition of the crisis supplementary contribution on natural persons, after the reduction of the VAT rate on high-intensity labor services, after the major reform of the IPP, after the improvement of the scheme of “stock options”, you propose today a reform of the corporate tax. When I call this draft the last part, I mean only the last part for this legislature. Indeed, what matters, today, is the future of our taxation that will be in the hands of the next Minister of Finance, hoping, on my part, that it can be the same!

Four years ago, the initial finding was constricting: more than 400 billion — we were still talking in Belgian francs at the time — of over-taxation compared to the European average. Since then, half the road has been taken, so there is still, in good logic, half the road to go. Knowing, Mr. Minister, the endurance qualities of the pilgrim of taxation that you are, I have no doubt that, to the extent that the circumstances allow it, you will rush to travel this remainder of the way. You have already announced some paths to escalate: - in terms of IPP, only 3 rates, the highest of which would not exceed 45%; - for horeca, a much larger uniform reduction of restaurant fees and a reduced VAT; - for ISOC, the abolition of the additional contribution and a base rate of 30%.

What does this project represent? This is a significant step towards a more competitive corporate taxation. While tax competition has a limited impact on the level of corporate tax, it is, on the other hand, a key element of corporate tax. The Higher Finance Council clearly showed in its report that at the base rate level our ISOC was completely non-competitive, a real horror for candidate investors. The Supreme Council of Finance, however, and rightly nuanced this finding, clarifying that the actual ISOC rate placed us in a more median position, even if it is the upper half. He also stressed that in the last ten years, the real rate has been constantly increasing and represents an increasing share of our national product. The government came to the appropriate conclusion: considerably lower the nominal rate without jeopardizing the budgetary balance.

Furthermore, in accordance with the terms of its declaration of July 1999, it emphasized a genuine tax relief for SMEs, the main job creators. This approach is consistent, as has been the whole fiscal plan of this government. Of course, the ideal would have been, as was the case with the IPP, to ⁇ a real reduction of the effective tax pressure on all companies. It is known that the carcass of strict fiscal neutrality is due somewhat to economic circumstances, much to political constraints and, a few months before a electoral deadline, therefore it is not forbidden to dream for the future. by

Recently, in my report, I had the opportunity to outline the main measures of the proposed reform. I will not come back. I prefer to express here a number of wishes for a future that I hope very close.

First, in terms of financing of SMEs, the establishment of an exempt investment reserve provided for by the project is an excellent measure. The existing ceilings should be raised as soon as possible. But ⁇ more innovation will be needed and the private Pricaf intended to stimulate investments in unlisted companies is probably the most interesting track today. Fiscal incentives will be needed. I know the minister thinks so. We will have to try to ⁇ this as soon as possible. by

Furthermore, the introduction of a tax consolidation scheme is all the more urgent as it is already in force in most neighboring countries. It is essential to take into account the economic reality of the group in order to ensure the competitiveness of the Belgian groups and not to accumulate an excessive lag on the European level, since it must also be the first step towards a consolidated taxation regime at the European level. In fact, the explanation provides for the progressive entry into force of the tax consolidation scheme over a five-year period. I dare hope that it will be possible to go much faster in this area. by

With regard to cross-border mergers, our legislation is also delayed. I have submitted a bill to resolve the issue and to incorporate the directive, as has already been done in most of our neighbors. Given the extremely technical aspect of the problem, the proposal was rightly “commissioned”. However, I call on the Minister to find a solution within a reasonable time, that is, very quickly.

With regard to SICAFI, our legislation has barriers to their development that foreign legislation does not know. The project also risks aggravating their situation. A working group was established to examine the situation and the overall tax problem related to SICAFI. I would like to insist that here too, a rapid completion of the group’s work allows to uncover a competitive solution. In this field, the Anglo-Saxons and even the French are much more imaginative and dynamic than us. There would ⁇ be lessons to be learned from it. by

And then a little heartbeat. Yes, Mr. Speaker, I see that you are surprised, but even a fiscalist can have a heart. These are kindergartens or, in other words, kindergartens of early childhood. The crying shortage of seats represents today, as several speakers have also developed in committees, a real societal problem.

A quick solution must be found and it is known that it will have to include a tax incentive. I know that the minister is working on this, in consultation with the communities — this is logical since these are matters that depend on them — but I insist that the solution can be intervened before the end of this legislature.

In conclusion, it is the best project that economic circumstances, on the one hand, and the political constraints of the moment, on the other, make possible. This project must be seen as the first step in a more comprehensive and more international reform of the ISOC, involving – as was largely the case with the reform of the IPP – a real budgetary cost.

It is with conviction that the MR group will vote on this new part of the overall tax reduction plan undertaken by this government.

Mr. Speaker, I will try not to prolong the debate unnecessarily but I will make a few comments framing a little the project and a few elements about the project itself.

First of all, I would like to thank all the participants in this debate, both in the plenary and in the committee, and the rapporteur, who had the opportunity to summarize very briefly how the text was examined in that same committee. I think it is necessary to associate with the rapporteur – as is usually the case – the services; the rapporteur obviously holds the pen, but with a minimum of assistance from the services, to say with a certain euphemism.

The general framework of the corporate tax reform is ultimately the general framework of public finances. I would like to remind you that while tax cuts play a very significant part in the policies implemented by the current majority, this is mainly due to the fiscal balance achieved since the 2000 fiscal year — while we had experienced fifty years of deficit — and to a sharp decrease in debt. This gives marges of manoeuvre allocated, in large part — some have recalled — to the reduction of the tax burden but also to a number of new expenses. I think of security spending – I think enough has been talked about the policy reform in this assembly – health, pension or other types of allowance spending and investment spending.

It is therefore through the reduction of the debt and the balance of the budget that we get to work in this way. On the fiscal level — that is another story — several new measures were taken, with in the first place — and you know, Mr. Pieters — the reform of the personal tax.

I will not list all the measures, but I can say that in 2003 we must evolve towards a tax reduction of more than 3 billion euros, more specifically 3 billion 300 million euros, only for 2003, with a very significant effort in terms of corporate taxation from 1 January 2003. In fact, we are moving towards a reduction in personal taxes of about 18%, which generally corresponds to 5 billion euros, calculated over the years 2004 and 2005. The measure has an annual impact. Even in 2003 there is an impact of more than 3 billion euros and this without any compensation. This is a real reduction in fiscal pressure.

Vorts werden er nye maatregelen genomen inzake of social bijdragen. That was for the first time applied in 2000 on all companies. Er werden bovendien specifieke maatregelen genomen voor specifieke kategorien werknemers. There are also a number of measures, in tax matters itself, which affect certain sectors. I can understand that the corporate tax reform is considered as such for its own merits, but we must not lose sight of the fact that a whole range of sectors of economic activity have seen their tax situation or will see their tax situation improve through specific measures. I think of course of the construction sector with a reduction to 6% of the VAT rate on the renovation of buildings over five years. We obtained, at the beginning of this week, the extension for one year at European level of this measure. Therefore, this is an important element that I submit today to the Council of Ministers so that we can retain a 6% VAT rate in 2003 for the construction and renovations of buildings over 5 years. They are also concerned with sectors as diverse as the merchant navy, maritime fishing. The audiovisual and cinematographic creation sectors also receive a number of incentives through voted or voted legislation. I am referring to the program law. by

In the economic development sector, scientific research will be ⁇ supported from 2003. This will amount to €7 million in reductions this year. There will also be an annual reduction of 30 million euros.

Very specific measures have also been taken. I will cite, in the field of business activity in general, the revisions of the legislation on “stock options” which will come in plenary session in the law-program and which will allow to soothe a number of fears for all those who have participated in options plans. by

In the same spirit, the employee participation was established by the law of 22 May 2001 with significant tax benefits. There are also legislation in debate in Parliament on the status of a caring spouse and the second pillar of pensions. These are all measures that must of course be kept in mind when looking at corporate tax and the corporate tax situation. It is clear that, of course, the legislature will not be neutral. We will have achieved a number of real tax cuts in the business area.

I would just like to make a comment, Mr. Speaker, since this is a debate that had taken place in Parliament and that has developed, in recent days, through the press and respond to all the members of the CDH participating in this debate since it is from this group that came the criticism, ⁇ in the press, in recent days, about a particular tax point in the various measures: school buildings.

As I also said in the press, not having much opportunity to debate in assembly with this group, I know that some political groups lose a lot of their members, that political leaders leave formations. In others, people are coming. It is likely that within this group, Mr. Poncelet, who left us to perform important functions in a specific area of activity, may not have provided all the information about what has been accomplished in our assembly. I would just like to remind you that we are asking these days whether measures to reduce VAT on school buildings have been implemented. The application has been on the European table since September 2001. Unanimity is needed to ⁇ this goal, but we had planned, otherwise, measures at the federal level. These measures were taken. They were voted by this assembly in December 2001 and remove the registration rights on the contribution of school buildings to the organizing authorities, ASBLs and foundations. We also removed the tax that in some way replaces the succession rights on these same buildings. I even said in that assembly that when it comes to buildings, it was about targeting everything that serves for teaching, such as, for example, swimming pools or chapels, since it seems that this is the case. All this is concerned. by

I would just like to have the opportunity, Mr. Speaker, from time to time, when such commitments are taken in this assembly, to check the state of execution within the assembly itself. But I will not respond longer to all the members of the CDH present in this important debate.

Beyond that, of course, we are dealing with the specific corporate tax reform.

I would like, as a first element, after hearing all the comments in the committee and in the plenary session, to recall, first of all, that what rejoices me most in a reform like that is the reaction of the companies.

I do not intend to implement tax reforms, essentially aimed at penalizing the various taxpayers concerned, especially when they constitute — many have recalled — drivers of economic activity. However, I find that this bill has received a very favorable welcome from the representative organizations of SMEs and middle classes, a favorable welcome from the federations of larger companies and, indeed, a number of more critical points coming from specific sectors of activity.

The second is budget neutrality. This will be verified by the Court of Auditors. It must be perceived as being a system that makes the state not profit through corporate tax reform as it does not lose.

Of course, if a return effect had to intervene, it would allow us to go further in the reform. But even in the so-called "compensation" measures, I recall that one of these measures, accepted as such, is first and foremost a measure of cash. This is the measure on depreciation that makes the tax impact will be the same for companies but spread over a larger number of years. This measure only applies to large companies, SMEs are excluded. This means, according to my colleague’s analysis of the Budget that we have had the opportunity to submit to the commission, that more than 40% of the cost of the reform is compensated by a cash measure that will not change, in the long run, the tax situation of the companies concerned, which will benefit from the same amortisation capabilities, but spread somewhat over time. by

There is a second measure for regional taxes. I know there are many discussions in this regard.

First, it is not a new measure. There are other examples of such a system in which there is no possibility of deduction for specific costs for a company or a person. Second, there is a distribution of regional taxes between the three different regions. I gave the figures to the committee. In 2000, there was a division between the three regions. For Flanders it was 57%, for Wallonia it was 24% and for Brussels it was 19%. We need to be calm with other figures. This is the reality of tax administrations. There is a distribution with such influence in the different Regions, but it is always possible for the Regions to go to another system. Mr. Borginon, it was a very long discussion in the committee in this regard. For a real fee paid by a company to — for example — a Region or an institution of a Region in relation to such a policy, it is possible to provide a deduction item with some conditions. First and foremost, it should be a real service from the Region or an institution of the Region, but there must also be a direct, proportional link between the fee and such service. Therefore, it is perfectly possible to move to another system. We have now, at the request of the Flemish Government, established a consultation committee on this subject. It is normal to do that. It is only a problem of reorientation of a policy in the different Regions. It is perfectly possible to do that. It will be a choice of the different regions. Le troisième élément sur lequel vous voudrais revenir, sans en faire l'exégèse, a trait aux mesures de compensation qui n'ont pas été retenues. In particular, I think of the company’s cars. In the matter, nothing changes. The existing situations are ⁇ ined. You dirai simply, in order to avoid any confusion on this point, that not only, nothing ne change but that in the course of this legislature, we have taken measures encouraging a certain number of behaviors and matters of mobility, and that includes with individual vehicles. Their

To take the only obvious examples, we strengthen the possibilities of deductibility, especially in the case of carpooling (we increased the distances to 50 km to go and 50 km back). I emphasize this in the passage, as it may interest many parliamentarians members of the committee to know that many questions have been raised lately — I do not know where this concern comes from — from cyclists fearing that their possibilities of deductibility are limited. I confirm that a cyclist can deduct 0.15 , which is slightly more than 6 former Belgian francs, per kilometer for a distance traveled of 50 km to go and 50 km back.

If there are many workers who, in our country, accomplish daily more than 50 km to go and 50 km back by bicycle to get to their workplace, I strongly wish that they join together in an association. I will receive them personally in order to examine whether their situation can be taken into account, but I do not understand this attitude consisting, in recent weeks, in asking a series of questions about this status. Obviously, there has been misinformation circulating on this subject. by

The same applies to all those who, like my colleague in charge of Foreign Relations, would go to their work by motorcycle. Nothing has changed. The deductibility is complete. It is the actual costs that must be proven. There is no kilometre limit. For individual vehicles, we have not introduced limits beyond the existing 0.15. They were only allowed to go further for what is called car-covering. by

Thus, when someone goes to work in a third-party vehicle, even without exposing any charges, that person can also deduct 0.15 of the kilometer travelled, on the basis of 50 km go and 50 km back. A number of security-related debates taking place in this assembly, I systematically specify that, when I mention the fact of going to work in the vehicle of a third person, it is obviously with the consent of the latter. This is a car car, not a car jacking.

Furthermore, other elements will be included in royal decrees, which will normally be adopted today in the Council of Ministers and relate mainly to income definitively taxed. We are trying to understand the reality more and more. I will not return to other discussions such as those relating to liquidation bonuses. We have provided sufficient details on this issue in the committee. I will just come back recently on a question asked in the committee.

Beyond this neutrality, the general objectives of the reform are simple. The reduction of rates is consequent, the reduction of rates accompanied by specific measures in favour of SMEs, which I will not detail, except the exclusion of the application of compensatory measures to them, the investment reserve that should enable them to increase their own funds and develop their investment capacity and, for all new enterprises, the ability to avoid, during the first three years, an increase in taxes linked to an insufficient calculation of advance payments. There will be no more exceptional increases, which should allow companies to grow more serene. by

How, on this aspect of the main objectives, go further? Of course, it will be necessary to move towards the abolition of the crisis supplementary contribution on companies and lower the tax subsequently up to 30%.

This may be a response to Mrs. Moerman. It is true, it is unfortunate, it is another tax for companies. However, I made a proposal, like the Prime Minister, namely a new tariff of 34% for companies. We now have 33%, plus the crisis contribution is that 33.99%. I think it would be better for companies to have such a tariff of 33.99% including such a specific tax, than a tax of 34%. But on a psychological level, it is very important every next year, and as soon as possible I hope, to go to an abolition of such a specific tax and to a tariff of 30% and specific efforts in terms of safety. En matière de sécurité, car cela a été relevé à plusieurs reprises, déjà aujourd'hui, des mesures sont prises dans le projet. The investment reserve can serve, well understood, to investments in matters of security and in particular the safety of work. I hope we can go a little further in this matter.

Before I make a few comments on aspects other than the general philosophy or the general lines of corporate tax itself, I would like to answer a question raised in commission by Mr. Van Weddingen and for which I had announced that we would go a little further in the plenary session. He had asked me about the technical problem of the bonus resulting from a purchase of shares considered as a dividend. Article 281 of CIR 92 provides that the mobile pre-account for dividends whose securities are assigned by the beneficiary in the exercise of his professional activity is only accounted for on the condition that the taxpayer had the full ownership of the securities, at the time of the assignment of the payment of the dividends. However, this condition cannot, by definition, be fulfilled in the context of shares purchase operations. I had indicated the intention not to prevent the imputability of the mobile pre-account in the context of a company’s redemption of securities. The company that buys the shares must pay a furniture advance of 10%, which is equated with a liquidation. This pre-account must then be able to be charged by the company concerned. I had said that I would ask my administration to verify whether this accuracy is sufficient, and I would therefore like to clarify for the annals that Article 264 paragraph 1 er, 2° and 2° bis of CIR 92 provides for the exemption from mobile pre-account in the case of acquisition of shares or equity shares listed on a regulated stock market or in the case of acquisition of shares or equity shares on a universal basis in the context of a subsidiary merger with a parent company. These exceptions will affect the majority of shares or equity acquisitions. Eventual problems with the implementation of the provisions in the project will therefore be limited to the transactions between the parties who know each other. In this case, the parties may provide contractually that the acquisition by the issuing company is made in order to cancel the shares or shares purchased and that the price will be settled with deduction of an amount equivalent to the furniture pre-count that will be due at the time of the projected cancellation.

Subsequently, Article 281 of the same CIR 92 and Article 123 of the Royal Decree of Implementation of that CIR 92 provide that the imputation of the mobile pre-count is subject to the condition that the shareholder has the full ownership of the shares or shares, at the time of the allocation or payment of income — art. 281 CIR — and that the furniture pre-count is charged to the tax, insofar as it relates to income that contributes to the constitution of the taxable base — art. 123 of the Royal Order of Execution.

It may be admitted that these provisions do not constitute, in themselves, an obstacle to the imputation of the mobile pre-count held in connection with a aforementioned transaction of acquisitions or own shares, where the shareholder held those shares or shares in full ownership at the time of their repurchase by the issuing company and provided that this transaction is carried out in order to cancel the shares or shares repurchase and, that the moment of the acquisition and the moment of the cancellation by the issuing company occur during the same taxable period envisaged in the head of the shareholder who performed those shares or shares (stand still principle). Article 106, paragraphs 5 and 6, of the Royal Decree of Implementation of CIR 1992, also applies to this matter. When the repurchase transaction is carried out under the conditions described in the second, i.e. what I said about Article 281, i.e. the acquisition carried out in order to cancel the shares or by own acquisition and cancellation during the same taxable period, the waiver of the collection of the furniture pre-count may be admitted provided that the conditions of permanent holding and minimum participation are already met at the time of the acquisition (the same stand still principle).

Finally, the provision of Article 267 of CIR 1992 determining the receivability of the mobile pre-account must be understood as regards the liquidation voucher for the acquisition of shares or equity shares, in the sense that the award or payment of the income occurs at the time when a dividend is expected to be distributed, pursuant to Article 186 of the same CIR, taking into account the legal fiction created by that provision.

I promised, Mr. President, to provide these additional elements from my administration. The text will also be available for the full report.

To conclude, let us highlight the fact that the text contains other important elements. Among them, and above all, is the ruling, which will, I hope, be applied at the very beginning of the year since the implementing texts are also presented to the Council of Ministers today. The coordination centers are undergoing a review, which is still under discussion with the European Commission. We will continue our work on this point. With regard to control, we have also taken some measures that should facilitate the organization of control by our administrations, in particular at the place of operation of a number of companies and not only at the headquarters.