Proposition 51K0352

Projet de loi modifiant l'article 215, alinéa 3, 4°, du Code des impôts sur les revenus 1992.

General information ¶

Submitted by

PS | SP MR Open Vld Vooruit Purple Ⅰ

Submission date

Oct. 28, 2003

Official page

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Status

Adopted

Requirement

Simple

Subjects

direct tax tax on income corporation tax

Voting ¶

Voted to adopt

Vooruit PS | SP Open Vld MR

Voted to reject

LE N-VA FN VB

Abstained from voting

Ecolo

Contact form ¶

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Discussion ¶

Dec. 18, 2003 | Plenary session (Chamber of representatives)

Full source

I refer to my written report.

Somebody ask-t-il the word? Does anyone ask for the word?

This legislation is likely to complicate the situation of small and medium-sized ⁇ and self-employed. In fact, it plans to increase the minimum remuneration of directors or managers of companies, and this in a rather exceptional way since, in four years, we will see an increase of 9,000 euros. This may make the situation quite delicate for some.

For those whose company will realize, in 2008, a taxable profit before remuneration of the administrator or manager of 72,000 euros, there is no problem. On the other hand, for those who are below those 72,000 euros, the 50% rule applies. Therefore, the administrator or the manager of the company may be paid at the rate of 50% of the taxable profit before remuneration of that administrator or manager. If, after a tax recovery, the taxable profit of that company increases slightly, the remuneration of the administrator or manager will be insufficient since it will no longer correspond to 50% of the taxable profit of the company before remuneration of the administrator or manager.

This poses a problem. If the administrator or manager has not received sufficient remuneration, a snowball effect will occur. Since this company can no longer benefit from the reduced tax rate, problems will arise with advance payments which would therefore not have been sufficient given the increase of the tax; this will also have consequences in terms of depreciation, investment income and deductions for investment.

Therefore, by increasing, in a rather considerable way over time, the minimum income of the administrator or manager, we will generally affect much more companies; in fact, there are more companies that have an annual taxable profit before remuneration of the administrator or manager between 0 and 72,000 euros than companies with an annual taxable profit between 0 and 50,000 euros.

In conclusion, this bill will not only increase the financial insecurity of companies but also affect a greater number of them.

Mr. Speaker, Mr. Minister, dear colleagues, I was able to extend this input during the committee discussions. I can be quite short here.

The bill is clearly contrary to chapter 8 of the policy note of the government-Verhofstadt II. Dear colleagues, I don’t know if you still remember the content of the policy note, but in chapter 8 there was a point related to oxygen for knowledge and enterprise. This further increase in charges over a few months is indeed an attack on the institute enterprise. The previous government had as its policy objective the realization of the active welfare state. I think we can say today that this active welfare state is a total failure. Unemployment has increased and the employment rate has declined. A bridge pension at 48 years of age is of course a solution for the concerned, but it is socially difficult to finance.

Rather, you are now talking about the creative welfare state, which is a new invention after the active welfare state, and you provide incentives for research and the establishment of new enterprises. However, we note that exactly the opposite is happening and that the burden on the companies is constantly increasing. I refer, for example, to the increases in taxes on energy products, the increases in electricity prices resulting from the chaotic liberalization of energy, the costs of presenting the annual accounts and the increase of the flat-rate social security contribution from 335 euros to 365 euros.

What is it about now? Until now, a benefit of reduced corporate tax rates has been provided for companies that, inter alia, in a taxable period grant at least one of their business managers a salary of at least EUR 24,500 or a salary equivalent to the taxable income of the company concerned.

The proposed bill will gradually adjust the basic amount of EUR 24.500. It is increased successively to 27 000 EUR for the year of payment 2005, 30 000 EUR for the year of payment 2006, 33 000 EUR for the year of payment 2007 and 36 000 EUR for the year of payment 2008. The increase in the salary of business managers is approximately 50% over a period of 5 years, when taking into account amounts of 24,500 euros, respectively, established by Royal Decree of 20 July 2000, and 36,000 euros, as determined in Article 2 of the present bill.

By raising the minimum wage referred to in Article 215, the government deprives a large number of SMEs of financial resources. The draft law does not take into account young enterprises and SMEs that already find it difficult to finance themselves.

It is also contrary to the layout of the corporate tax reform approved by Parliament in December 2002. This reform was intended to facilitate the financing of start-ups.

The loss of SME tax status can have catastrophic consequences for a company. Mr Wathelet has already pointed out this. The consequences cannot be overestimated and are not limited to the loss of the right to the reduced upward rate. In the committee meetings, I have demonstrated through examples what the consequences can be. These include the depreciation rules, the re-calculation of the investment deduction, the loss of the right to the investment reserve and the loss of the right to tax credit.

It is very strange that the proposed bill to increase last year was not included in the corporate tax reform. The Minister has remained guilty of the answer to this question. Why did this increase not be applied last year together with the corporate tax reform? Would the government prevent this measure from being seized before the May 2003 elections?

In any case, this measure limits the number of companies that can rely on the reduced rate. In practice, this means that before the parliamentary elections, the government will pass a law involving a reduced corporate tax rate and take measures after the elections that will prevent many companies from benefiting from this reduced rate.

This measure will reduce opportunities for self-financing for SMEs. Indeed, they are threatening to resort, either immediately or after a tax check, to the reduced interest rate as a result of this increase measure.

CD&V will not approve this design.

Mr. Speaker, I try to make praiseful efforts to get acquainted with the documents and answer questions in the speaker’s language. Also, I did not have the presence of spirit to read the French mouth of the previous project. So that the services do not die idiots like me, I would like to clarify that Mrs. Roppe’s report is perfect in French.

In Dutch, it contains a mistake. I have seen it!

The reference made by Mr. Leterme in the exhibition of the reasons actually refers to Article 3 in niet artikel 13 zoals geschreven in het Nederlands.

De volgende keer zal ik ook de French text lezen in niet alleen het Nederlands. Although the numbers are in Arabic, a mistake was made in their translation into Dutch! This is article 3 of the bill.

As for the current project, I refer to the report. I can understand that political formations that have no longer indexed tax rates for ten years are surprised that we are indexing them today. It is true that the amounts included in the project have not been indexed since 1992. If they had been, we should have reached, as early as the financial year 2004, 30.296. We will not exceed this threshold until 2007. Even in 2006, we will not get through it.

This is true: some rates are adjusted to inflation to the benefit of the taxpayer, others are obviously adjusted to the disadvantage of the taxpayer. Otherwise, in a few decades, the remuneration set out in the law would be completely inconsistent. I therefore acknowledge that we have taken the path of indexing all tax patterns. In most cases, for the benefit of taxpayers; in this casci, this can have a negative effect, but that is the logic of the system. I therefore understand that the formations that have not indexed the tax rates do not want to do so here either.

I think the Minister’s explanation is too simple. The sum of 24,500 euros was fixed by a royal decree of the year 2000. It is a 50% increase in five years. I think that is very clear. A law was passed last year that implies a reduction in the corporate tax rate. Today, however, measures are being taken which will significantly reduce the number of companies that can benefit from this measure. That is the essence of my comment.

Mr. Speaker, first of all, I agree with the Minister’s remarks to say that we are not reaching the indexed amount for the 2006 tax year. However, for the 2007 and 2008 tax years, there is a 10% indexation each time, which is still a consequence.

Second, the increase in the minimum income to be granted to executives and managers of companies has a significant consequence at the level of reducing the tax rate. By increasing the minimum wage of managers and managers in such a significant way, problems could arise — as I explained recently — at the level of companies that do not receive enough income to pay those minimum wages and therefore apply the 50 percent rule. Therefore, if their profits are revised upwards, those 50% will not be reached, with as a consequence all the problems with tax reductions and advance payments. However, by increasing this minimum income of managers and administrators, you extend those risks.