Proposition 51K1608

Projet de loi modifiant l'article 205, § 2 du Code des impôts sur les revenus 1992 en matière de revenus déductibles des bénéfices imposables.

General information ¶

Submitted by

PS | SP MR Open Vld Vooruit Purple Ⅰ

Submission date

Feb. 14, 2005

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

EC Directive tax relief direct tax subsidiary parent company corporation tax

Voting ¶

Voted to adopt

Vooruit PS | SP Open Vld MR

Abstained from voting

CD&V Ecolo LE N-VA FN VB

Contact form ¶

Do you have a question or request regarding this proposition? Select the most appropriate option for your request and I will get back to you shortly.

Discussion ¶

March 17, 2005 | Plenary session (Chamber of representatives)

Full source

Mr. Speaker, I also refer here to the written report, although the report was amended today at the request of Mr. Devlies. The report with the comment made by Mr. Devlies is rounded and it is on all banks.

There is an improved report.

Mr. Speaker, Mr. Minister, Colleagues, the bill aims to abolish the limitation of the profit with certain rejected expenses eligible for the DBI deduction following a comment from the European Commission. The Government reserves the limitation of the profit with certain rejected expenses for the DBI dividends if they are granted or granted by subsidiaries established outside the European Economic Area.

A Belgian subsidiary is established within the European Economic Area so that the limitation of profit with certain rejected expenses for dividends paid to a Belgian parent company will no longer apply from the financial year 2005.

The preliminary draft law also stipulates that it is dividends granted or granted by a subsidiary established in a Member State of the European Economic Area. According to the preliminary draft law, therefore, it should not be dividends granted or granted by a subsidiary established in another Member State of the European Economic Area. Internal Belgian dividends and intra-Community dividends are therefore treated equally.

However, the draft law was amended following the opinion of the Council of State, Section of Legislation. The Raad van State has not understood that internal Belgian dividends should also be included in the abolition of the limitation of profits on certain rejected expenses eligible for DBI deduction. The Raad van State raises the question of whether the reference to Article 202, § 1, 3° is correct, since that provision relates to the case where a Belgian company gains income from reference shares of the National Society of the Belgian Railways which is itself a Belgian company.

Following the opinion of the State Council, Division of Legislation, the preliminary draft was amended and the draft article 205, § 2 reads as follows: "The reductions listed in paragraph 1 do not apply to income referred to in Article 202, § 1, 1° and 3°, granted or granted by a subsidiary established in a Member State of the European Union".

To that extent, there is no problem, had it not been that the proposed third paragraph of Article 202, § 2, restrictively defines subsidiaries as the subsidiaries as defined in the Directive of 23 July 1990 on the common tax regime for parent companies and subsidiaries from different Member States.

Article 3, 1B of the mother-daughter Directive defines the subsidiary in relation to the parent undertaking. For the purposes of this Directive, the status of parent company shall be granted at least to any company of a Member State which fulfils the conditions laid down in Article 202 and which has a participation of at least 20 % in the capital of a company of another Member State which fulfils the same conditions.

From a legal point of view, we can at least say that the reference to the mother-daughter directive does not benefit the legibility of Belgian law. Of course, it becomes quite difficult when the dispositive leads to a different conclusion than the explanation. According to the law, the abolition of the limitation of the profit with certain rejected expenses applies only to intra-Community dividends, i.e. dividends derived from a subsidiary established in a Member State other than the parent company.

Internal Belgian dividends are therefore subject to a less favourable tax treatment. According to a literal reading, internal Belgian dividends are excluded. This is not consistent with the intention as expressed in the memory of explanation. However, as the policy of the government has repeatedly shown, with the good intentions in the memory of explanation, she paves the way to her heaven. A clear law does not need to be interpreted.

Therefore, our group will abstain from this bill.