Proposition 51K1778

Projet de loi instaurant une déduction fiscale pour capital à risque.

General information ¶

Submitted by

PS | SP MR Open Vld Vooruit Purple Ⅰ

Submission date

May 11, 2005

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

tax relief direct tax investment tax on capital registration tax corporation tax

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 ¶

June 2, 2005 | Plenary session (Chamber of representatives)

Full source

Mr. Speaker, colleagues and colleagues,

The rate is increased by half a percentage point.

In addition to the notional interest, the draft law includes a second measure in favour of the companies, namely the abolition of the registration right on the contribution to a company. Small and medium-sized enterprises will be able to choose between the existing investment reserve and the new formula provided for in the draft law.

The total cost of the measures is EUR 566 million. Therefore, the government has taken a number of budgetary compensatory measures: the abolition of the corporate tax credit; the abolition of the investment deduction, except for patents, research and development; more rational energy consumption; security; and reusable beverage packaging. The change in the definition of "tax added value" means that instead of the net sales price, the gross sales price is taken into account. The real compensation amounts to at least 400 million euros. In addition, there is a saving on the investment reserve, as companies have to choose between either notional interest or investment reserve.

In addition, the government expects a return effect of 57.6 million euros. There is also an anti-abuse provision to combat fraud through villa companies.

Colleagues, the philosophy behind the bill was shared by a vast majority of committee members. Some found the design going too far, others found it not going far enough. The Minister saw in it a sign that it was a balanced bill.

Several committee members submitted amendments but those were not adopted. Collega Nollet wanted to mitigate the bill on a number of points and incorporate legal guarantees regarding employment. Mr. Viseur, Mr. Bogaert, Mr. Devlies and Mrs. Pieters wanted to increase the rate for SMEs by 1 percentage point instead of half.

There was also discussion on Article 9 which stipulates that the amount of the deduction must be included in the reserve. Some commissioners feared that this could undermine the success of the proposed measure. However, the Minister believed that this article provides a balanced response to the various aspirations formulated in terms of the conditions.

Colleagues, the entire bill, including the legislative improvements, was adopted in the committee with 9 votes in favour and 3 abstentions.

Mr Tommelein, I thank you for your report and you are now given the word for your presentation for the VLD group.

Mr. Speaker, Mr. Minister, colleagues, the proposed bill aims to treat the use of venture capital for the financing of a company on the fiscal level in the same way as the use of foreign funds. Where an enterprise uses loans for its financing, it may deduct the paid interest and capital repayments from its taxable base. However, if it is financed by its own resources, this is not possible.

We are pleased that the government is removing that economic unfair discrimination between both forms of financing by allowing companies to deduct a notional interest on the risk capital from their taxable base. This will be done through the calculation of the interest that the company would have had to pay if it had not financed itself with own resources but with foreign assets. The rates are based on the average rate issued by the Belgian State for linear bonds over a ten-year period.

The draft, as already stated in the report, also provides for a number of rules to ensure that the tax advantage remains in the company.

In addition to its notional interest, the draft law includes a second measure in favour of the companies, in particular the abolition of the registration right on the contributions in a company. The draft perfectly aligns with the corporate tax reform resulting in the Act of 24 December 2002 reducing the total rate from 40.17% to 33.99%, that is to say to a new nominal rate of 33%, increased with the additional crisis contributions.

In addition, a number of measures specifically tailored to small and medium-sized enterprises were also taken. The 28% rate applicable to those companies was reduced to 24.25%. Small and medium-sized enterprise companies may, under certain conditions and within certain limits, create an investment reserve from the tax exemption. Small and medium-sized enterprises shall be exempt from tax increases if no or insufficient advance payments have been made during the first three financial years following their establishment.

Colleagues, that new scheme is clearly beneficial for all enterprises, both small and large. Even for small enterprises, an additional tax benefit is provided by increasing the rate by half a percentage point. Small and medium-sized enterprises will be able to choose between either the investment reserve or the new formula of notional interest.

With that proposed measure, the government will undoubtedly ⁇ its goal of stimulating the strengthening of the equity of the companies, which will have a positive impact on investment and employment. The automotive financing of all our companies will be increased. The high credit rating of our companies will undoubtedly result in a decrease in the number of bankruptcies. Indeed, capital-intensive enterprises naturally have a high level of solvency, which reduces the risk of bankruptcy. An anchoring in the country through the investments they make there is a also not negligible advantage over the risks of relocation.

The creation of new companies will also be encouraged.

In addition, the measures in question provide a valid alternative that allows the activities of the coordination centers whose recognition expires by the end of 2010 to remain in Belgium. The total employment of these centres can be estimated at 19,000 to 20,000 people. Approximately half work directly for the coordination centers, while the balance consists of indirect jobs. In the period 1994-2003, the combined social capital of the coordination centers increased from EUR 39.72 billion to EUR 149 billion. In 2003, the coordination centres financed one-fifth of the investments in the manufacturing industry, although no specific incentives were granted. This has contributed to the preservation and further development of employment in Belgium.

It is also important, colleagues, that this is a measure that is generally applicable and therefore consistent with European directives. This provides the necessary legal certainty, which is a must not be underestimated condition for creating an attractive investment climate. In addition, the means to safeguard our competitiveness will depend less on reference tax systems, but more on a normal system that has been made more attractive. The latter is of particular importance in the context of the recommendations made by the High Council for Finance in its April 2001 report on the corporate tax reform.

The fact that these proposed measures are received very positively from various angles has been shown more than sufficiently in the media in recent weeks. For example, Price Waterhouse Coopers is overwhelmed with questions about the new system, which still indicates a widespread interest in these measures. The reactions appear to be enthusiastic and many companies are jumping to strengthen the equity of their Belgian divisions.

According to Professor Jef Vuchelen, a macroeconomist at the VUB, the measure is brilliant in its simplicity and perfectly meets the economic definition of profit. The reimbursement of own funds is a cost. In addition, the notional interest in the long run leads to cheaper bank loans because the demand for loans will drop, which is positive for both business and government.

According to lawyer Bernard Peeters of the Tiberghien office, the notional interest promotes the economic tissue and protects the creditors. The measure prevents shareholders from withdrawing cash from the company and the European Commission approves the system. Peeters thus decides that we should not neglect this competitive advantage in any case. According to the VBO, the government is making a major step forward with the regulation on the tax deduction for risk capital. According to the Association of Belgian Enterprises, the principle primarily benefits SMEs given their usually weak equity structure.

It also responds to the urgent need for legal certainty for the coordination centers. Also, according to Unizo, the interests of the SMEs are significantly defended.

Colleagues, not only in Belgium, the reactions are positive. Even our northern neighbors are looking jealously at the system that this government has developed. In this regard, I would not like to remind you of some passages from an article by professor doctor van Der Geld, titled: "Belgium, the shining example", which appeared in the Dutch Journal for Fiscal Law of 27 January 2005. I quote, Mr. Bogaert: "Another than with us," therefore speaks a Dutchman, "where it seems that it will not be chosen for fundamental solutions, but one thinks about importing the box solution with the associated problems of principle and practical nature, of the income taxes, the Belgians deal with the matter more thoroughly. Just before Christmas, I received the news that the Belgian Government had reached an agreement on 23 December 2004 on the introduction of a fictitious return in the corporate tax.

Mr Tommelein, you refer to an article in a Dutch journal, but it is an article that dates from the month of January 2005. At that time, the government’s bill was not ready. Probably that article was related to the bill submitted by colleagues from CD&V.

I did not really want to get involved in the discussion. I give my colleague Tommelein his moment of glory, but since you refer to the Netherlands, colleague Tommelein, I had a question. How much is the global tax pressure in the Netherlands as a percentage of the gross domestic product and how much is the global tax pressure in Belgium as a percentage of the Belgian gross domestic product? Per ⁇ he could do the room of that?

You have held this argument so much yourself in the Chamber Committee, and you dare to ask me such a question in the plenary session? As if we have not yet heard what you want to sell to the people. Mr Bogaert, I am sorry: you are always trying to give the Dutch brilliant example in relation to the very weak Belgian situation. So if I quote a Dutchman, you must also be able to counter it. I always have to listen to your explanation and it is always the same.

Since our colleague Tommelein remains responsible for the answer: in Belgium it represents 46% of the gross domestic product and in the Netherlands it represents 39% of the gross domestic product.

Can you explain to me, Mr Bogert, how much the budget deficit is in the Netherlands?

The difference is 7%.

You should not just quote numbers that are important to you and that fit you well! You have to quote everything.

I will overcome the accounting. I see that the VLD colleagues show particular interest in this given their congresses. In Belgium it is 46% and in the Netherlands it is 39%. That is a difference of 7%. That difference has increased by 2% over the past six years. If we multiply that 7% with our gross domestic product of 300 billion euros, we will get a difference of 21 billion euros in taxes that are levied more in Belgium than in the Netherlands.

I suggest that Mr. Tommelein now continue his interesting speech.

Mr. Bogaert, I suggest that you go to the market in the future, because you are ⁇ good at selling apples that look like pears.

We will continue to quote a Dutch professor. Mr. Devlies, for all clarity, Professor van der Geld is not talking about your bill, but about the Belgian government that had reached an agreement on 23 December 2004. "My already latent warm feelings for our southern neighbors were mixed in my mind with the image of the laughing Belgians who, enjoying a pot of beer, called to each other: "That is a lot smarter than what those Dutch are sitting on breeding. I had to give them right. Where we look for the fun things for international business, the Belgians choose the fun things for the whole business. Not only is that morally better defended – the only argument that international business has extra over the national comes close to blackmail: if you are taxally too expensive, we go to another – but above all I also see it as a tax scientist as an attempt to a more principled solution of a fundamental problem in the corporate tax (both in Belgium, in the Netherlands and in many other modern countries) and that fundamental problem lies in the taxation completely different treatment of own and foreign assets.” I would like to call on the Dutch Parliament to properly fulfill its task and to look critically at the type of solutions where fundamental problems are not fundamentally addressed. In the coming time I will smile extra wide when I hear a belgenmop, even if it is a bad one, because I see those laughing Belgians in the Council of Ministers in front of me. Those Belgian deckers, we can still learn a lot from them.”

Despite all these positive sounds and although the VLD is extremely positive towards the current bill, we are in favour of the new scheme being reviewed after a certain period and that, if necessary, the necessary improvements would be made.

This could be the case, for example, for Article 9 of the draft. The deduction for venture capital shall only be permitted provided that an amount equal to the deduction for venture capital granted for the taxable period is booked and remains on a separate account of the liability and does not serve as the basis for the calculation of the annual allocation to the statutory reserve or of any remuneration or allocation during the taxable period and the three subsequent years.

Mr. Minister, colleagues, it is known in this regard that Forum 187 has ⁇ that the coordination centers, which are to ensure the maintenance or strengthening of the credit rating of the foreign parent company, will find the mandatory reservation of the interest deduction unacceptable. The reservation condition also limits the cash flow that is often necessary to provide the necessary guarantees to lenders. According to the Forum, the reservation condition will therefore exaggerate the profits of the coordination centers.

Colleagues, I would like to conclude my argument by stating that the government has done groundbreaking work with the present bill by finally removing the tax discrimination between own and foreign assets.

The VLD even sees an extension of this scheme to the private sector, where a private person who invests own resources, for example through the construction, purchase or renovation of a home, could receive a similar deduction.

Indeed, our current tax system with regard to the real estate is conceived in such a way that only tax benefits can be ⁇ on condition that a mortgage loan is concluded. Well, according to the Flemish Liberals and Democrats, the tax discrimination between the use of own resources and borrowed resources should also be abolished for a private person.

The proposed system enjoys not only a number of renowned Belgian authorities, but also from abroad a great deal of support and respect. The VLD group will therefore unconditionally approve this bill.

I would like to inform you that there are still eight speakers registered after Mr. Speaking. Tagged with: mr. by Devlies, Mr. by Donnea, Mrs. Roppe, Mr. See also Mr. by Massin, Mr. Goyvaerts, Mr. Nollet and Mr. by Bogart.

Around 18:00, we will make a short five-minute break to close this afternoon session, before resuming the evening session.

Mr. Speaker, Mr. Minister, dear colleagues, the introduction of a tax deduction for venture capital or the auto-financing deduction, as mentioned in our own bill, is a positive measure for Belgian companies to improve their capital structure. This eliminates the unfavourable treatment of equity financing. A strong capital structure facilitates investments, makes companies more resilient to temporary difficulties, prevents bankruptcies and is therefore positive for ⁇ ining employment. Our group is in principle positive to such an approach and has also submitted a bill, signed by Mrs. Pieters, Mr. Van Parys and myself, which was also discussed in the committee.

However, the way this bill was handled raises some doubts. It took a long time before the government came up with a draft. The Minister had already announced this bill in April 2004. Our group immediately responded favorably. The communication on that bill was then returned several times to be used as a weapon in the 2004 election fight. At the end of 2004, many months later, however, there was still no draft law. As a result, we, together with a number of members of our group, made an effort to draw up a bill, which was submitted to the House in January 2005.

It was only after the heroic statements about Brussels-Halle-Vilvoorde that the government felt compelled to take action. Then this bill, a corporate tax reform, was announced as one of the fighting weapons for the coming months.

Then this bill was really wanted to be hunted by the House committee. I would like to protest against this. I do not think this is a way to do legislative work. This bill has been scheduled in a sluggish way, so not on the official agenda, but in an additional agenda. The documents were submitted only in extremis. At the request of the Prime Minister, it was also attempted to discuss this bill in a single session.

We must thank Mr. Tommelein, one of the last Democrats of the VLD, who came to our aid and who is at the basis of the fact that the discussion of this draft law was still extended by another week. In this way, there was still a discussion, but still not sufficient. If one wants to discuss such a draft in a proper way, one must take the time to do so, and one must also give the members of the committee the time to study the texts, do research work, ask for information, and so on. That has not happened. As a result, this bill will be the basis for many interpretations. By the way, I read today already a first article on this bill in a newspaper from a specialist-fiscalist, which points out a number of uncertainties.

This bill will ⁇ be of interest to the publishers of fiscal publications, the organizers of study days and the like, but it would still be of interest, colleagues, that we devote sufficient time to important drafts.

Furthermore, I had hoped that this bill would be the basis for a broad discussion on corporate tax as a lever of the economic event. Unfortunately, this has not happened, despite the fact that we are in an economically difficult situation. We know the figures of economic growth in Belgium for the first quarter. The second quarter is not getting better. The OECD has published figures for the year 2005, an economic growth of 1.3 percent. I also referred in the committee to the study of the American business magazine Forbes, which showed that Belgium has the third highest marginal tax burden in the world. Mr Bogaert speaks about Europe, but now it turns out that it is the second highest marginal tax burden in the world. The tax burden in percentage of GDP is the third highest in the world.

Mr. Speaker, I wondered if this is a new fact that Mr. Devlies has just discovered.

I did not understand it well.

We have not heard you, Mr. Versnick.

I just wondered, colleague, if that is a new data that you recently discovered.

It is a data that...

Mrs. Roppe wants to interrupt you.

I can help my colleague...

Can I first reply to Colonel Versnick?

I just got the word.

Annemie Roppe (sp.a- of the President. I just want to say that this has never been noticed in the committee, has never been repeated, and has never been said. This is really a novelty.

Mr. Devlies, you have the word.

Mr. Versnick, your comment is correct. This is a problem that has been raised for several years, but has become so striking that international magazines such as Forbes are beginning to pay attention to it and that studies are now being published around the world. This is an interesting data. When we talk about economics, taxation and corporate taxation, it is interesting to also talk about the fiscal situation.

I repeat, one of the basic elements of a good discussion in the committee could have been that it is internationally established that Belgium is the country with the third highest tax burden in the world.

The unemployment figures are also ⁇ interesting, especially than the figures of Brussels and Wallonia. If you know that in Wallonia there is a unemployment rate of 18 percent and in Brussels, the capital of Europe, a unemployment rate of 22 percent, then I still think that everyone can agree that there is an economic problem and that we could use the leverage of corporate taxation to remedy this and give new impulses.

Moreover – this is something of the last few weeks – we note that business leaders’ opinions about the future are evolving negatively and that the tendency to switch to corporate investments is weakening. I would also like to refer to the hearing we had with the Chamber of Commerce a few weeks ago. It was stated that there is a dramatic decline in investment in Belgium, especially when compared to the Netherlands. If both domestic and foreign companies do not invest, do you not think, colleagues, that the time has come to ring the alarm clock and see what is possible?

Recently, an interesting study was also published by Professor Vandenbussche of the KU Leuven. That study teaches us that the statement about the actual tax pressure on companies, which we have repeatedly formulated during the meetings of the Finance Committee, is correct. The Minister always claims that the corporate tax has been reduced. Indeed, the rates have fallen. In this, the minister is right, but he forgets to mention that the taxable basis has been expanded, making the result neutral or the actual tax burden is likely to have increased. The study, published by the Department of Economics of KU Leuven, fully confirms this statement.

In addition, the study teaches us that the actual tax rate for Belgian companies is the second highest in the European Union. That, Mr. Versnick, is an entirely new given. In the past, we were talking about the third highest; now we are talking about the second highest, after Italy, actual corporate tax pressure. The study relies on the annual figures of thousands of companies and disproves the impression that the tax burden on companies has decreased in Belgium. By expanding the taxable base, the effective pressure and revenue for the treasury remained the same. Despite the reduction of the official rate in 2002 from 40.17% to 33.9%, it is still 7.19% above the European average rate of 26.8%. In addition, the Belgian actual rate of 30% is much higher than the European average actual rate of 21.59%.

According to the study of Professor Vandenbussche — sometimes one must also listen to Belgian professors, dear colleague Tommelein — the first government-Verhofstadt systematically expanded the taxable basis in the period 1999-2002 in anticipation of the official tariff reduction at the end of 2002. This is a scientifically examined statement from a research institute of the KU Leuven, in which it was established that for several years the taxable base was expanded before the reduction of rates was carried out.

The professor also calculated that a reduction of the official Belgian tariff to the European average would bring our country additional investments of at least €2.7 billion. More specifically, Belgian companies would invest at least 1.4 billion euros in Belgium, rather than abroad, while American companies would invest at least 1.3 billion more in Belgium. When one speaks about employment and innovation — especially innovation is a great fashion word — one must know that in order to innovate there must be investment and in order to invest there must be an interesting fiscal climate, otherwise the incentive to make these investments is lacking.

I would also like to point out the problem of the coordination centers. I would like to come back to the discussion we held with the Minister in the Committee on Finance on 20 April 2004. That is more than a year ago. I pointed out to the Minister at that time that the corporate tax reform of 24 December 2002 means, among other things, that the coordination centers in their current form will be subject to a depletion scenario from 1 January 2006. From that date, a modified regime will gradually enter into force, the modalities of which must be established in a royal decree. Now, sixteen months after the passing of the law, no royal decree has yet been published. This creates legal uncertainty about the future of the coordination centers.

The Minister responded that the implementing decision has not yet been taken, given the negotiations with the European Commission on the conditions for the gradual abolition of the coordination centres provided for in KB 187 of 1982. The Minister did not explain this in his explanation. Subsequently, on the basis of questions asked by members of the committee, it turned out that this KB was undoubtedly pushed aside and that there will be no more KB. It is also important to know that the Minister said that the number of coordination centers was initially 400 and in the meantime — April 2004 — had dropped to 200. The employment of these centers was still between 9,000 and 10,000 people. In addition, an equal number of relationships have been created for the additional activities, outside the actual employment in the coordination centers. The Minister has renounced the KB that would resolve this problem in the transition period. This is an important position. On the other hand, we also pointed out to the Minister the important mutation of Belgian coordination centers to Switzerland. We have also submitted documents showing that companies are actively recruited to move to Switzerland. These are promotional campaigns that are conducted even by the Swiss government.

The Minister ultimately replied that his solution to the problem of the coordination centers is the present bill. Now it is evident from the views taken by the coordination centers themselves, represented in Forum 187, that the bill in its current form no longer meets the problem of the coordination centers.

Forum 187 calculated the impact of the interest deduction on equity on the result account of the Belgian coordination centers for the financial year 2002. Of the 223 centers, 20 suffer losses. They remain outside of the analysis. For 113 of the 203 profit centers — 56% of the total — the interest deduction on equity is a necessary but insufficient measure. Opportunities such as those in Luxembourg and Switzerland remain more attractive for those centres. They total 5,400 highly qualified employees, earning €370 million. These 113 coordination centres have an equity of EUR 47 billion and pay annually at least EUR 314 million to the State in the form of taxes and social security contributions.

For 79 centers or 38% the notional interest rate can withstand the competition with Switzerland; for 11 also that with Luxembourg, which brings the total to 90 or 44%. These centers employ 3,900 people and pay 294 million euros in staff costs. With a total equity of 86 billion euros and a balance sheet total of 110 billion euros, they pay 241 million euros annually to the State in the form of taxes and social security contributions.

In particular, Forum 187 sought to verify whether the measure provided an adequate alternative for the preservation of the decision centers in Belgium and for the related financial professions. It is regrettable that at the end of the discussions two other restrictions and obligations were included in the measure, which could undermine its effectiveness. It would be extremely regrettable that foreign investors would choose other countries when reading these two conditions. It is about the amount of interest deduction, which is linked to the market rate of a linear bond, which in itself is a good measure. On top of that, however, a revisable limit is provided, which can create legal uncertainty.

Coordination centers that are to ensure the maintenance or strengthening of the credit rating of the foreign parent company will find the mandatory reservation of the interest deduction unacceptable. The credit rating largely determines the external financing costs. The reservation condition also limits the cash flow. Some groups need a sufficiently large cash flow to provide the necessary guarantees to their lenders. Coordination centers bound by credit rating requirements and cash flow obligations cannot reserve the full amount of the deduction on equity for 3 years, according to Forum 187.

I have to say, by the way, that colleague Tommelein also referred to this problem.

For the Minister, this bill is a way of addressing the problems of the coordination centers, but as we have just seen, this does not satisfy at all. For a significant percentage there is no interest in this bill at all. A lower percentage of the coordination centers, 38%, might be interested, but is discouraged by the additional conditions you have included in article 9 of the bill. Supposedly — I asked the question in the committee, but I did not get a response — those were the demands of the Socialist Party to approve this draft.

In any case, we offer options to delete that article by submitting an amendment. Per ⁇ that is for Mr. Tommelein and for those who think in the same sense a possibility to escape from that article and thus to give that bill a little more effectiveness.

Furthermore, I would like to point out that the bill of CD&V contained other purposes, namely the anchoring and updating of the calculation of the taxable basis by law. After all, the King has so far failed to adjust the order of the six transactions in the corporate tax to the judgment-AMID of 14 December 2000 of the Court of Justice and the corporate tax reform by the law of 24 December 2002.

A second objective of our bill was the introduction of a minimum basis for offshore assault based on the assets of the company. This relates to that numerous group of companies that do not make a declaration in the corporate tax, but which in this way still contribute to the social event.

Finally, I would like to say a few words about the budgetary compensation. In 2004, the Belgian companies made 1.3 billion euros more in advance payments compared to 2003. This was an additional income in the corporate tax. I therefore believe that the costs of this proposal, which is budgeted at EUR 566 million — that is, not yet half of the surplus revenues generated in the company tax in 2004 — should not be compensated and that this amount should be made available to the companies. Nevertheless, you are switching to compensation, as you did in 2002; presumably it was even more than compensation in 2002.

You provide two compensatory measures in relation to which we would like to formulate the following comments.

The first is the abolition of the ordinary and distributed investment deduction for SMEs. This was a good measure that was systematically applied by all SMEs. Small and medium-sized enterprises are therefore paying extra for the financing of that measure in favor of large enterprises.

The second compensatory measure is the narrowing of the concept of "added value", both in the personal tax and in the corporate tax.

This measure is meant to compensate EUR 336,5 million of the EUR 566 million cost of the deduction of the venture capital. Small self-employed and freelance professions subject to personal tax contribute to a measure that benefits only the companies. The Minister cannot communicate the share contributed by the small self-employed and by the free professions. I remind my colleagues present in the committee that we have repeatedly asked the Minister whether he would explain to us how that sum of 366 million is composed and how much of this amount comes from the corporate tax and how much from the personal tax. I think it is essential that Parliament has this information. Our conclusion is clear. The financing of the companies is made to a significant extent by imposing a new burden on the small enterprises that are taxed through the personal tax.

Well, Mr. Speaker, dear colleagues, although we are in principle, of course, favorably attended to this deduction, we find that a good idea and we ourselves have a bill in that sense, we must find that here are imposed unnecessary conditions and compensations that cause this bill to lose its purpose in practice for a significant part. In those circumstances, we will have to refrain from this bill.

Mr. Speaker, Mr. Minister, dear colleagues, allow me to look forward to seeing this important project for our economy, this innovative project, this project of liberal inspiration debated in this assembly.

Mr. Minister, I congratulate you for your tenacity in this case because I know that some have not hesitated to put you sticks in the wheels. The implementation of the project of deduction for venture capital will have several beneficial effects for venture capital investment, and therefore for economic activity and for employment in our country.

First, the measure will eliminate the existing tax discrimination between the non-deductible cost of own funds, constituted by input of external capital and by self-financing, and the deductible cost of borrowed capital. As of 2006, companies will be able to calculate an interest rate on their own funds and benefit from a partial deduction of this cost.

Second, the measure will benefit in the first place SMEs that are often in a situation of structural undercapitalization. It will undoubtedly constitute a powerful incentive to strengthen their own funds and therefore their solvency, their profitability. Furthermore, for companies considered to be small companies, the base rate of deduction applicable to all companies is increased by half a point.

Third, in general, the measure will have a direct beneficial effect on the confidence of Belgian and foreign investors, and it is also important, to restore confidence, to restore a positive image for the investment climate in this country. The measure will strengthen the potential for economic growth through healthier companies, able to invest more and create jobs. This new deduction, which will benefit all companies, including SMEs, will help ⁇ the government’s goal of stimulating the strengthening of corporate equity.

Fourth, the measure is also important for coordination centers and related jobs. It should encourage many, if not all, to remain in Belgium when the tax status they currently enjoy will gradually disappear between 2005 and 2010. I also emphasize that the terms of the measure take into account the interests of all stakeholders. This makes it possible to postpone the deduction over a seven-year period in case of insufficient profits, giving SMEs a specific choice between the increased deduction for venture capital and the investment reserve. As for the fixing of the deduction rate, it is made by taking the amount of own capital, multiplied by a rate determined by reference to the OLOs at ten years and annually, without exceeding a fluctuation margin of 1% in the up or down with a maximum of 6.5%.

Furthermore, another relevant measure comes in addition to the deduction for venture capital: it is the total removal of the contribution duty. The proposed arrangement will thus be completed with all the desired consistency. Indeed, the current rate of the contribution duty at 0.50% weakened the competitiveness of Belgian companies compared to that of the Member States in which the taxation of the contribution duty is lower or even non-existent. Furthermore, it constituted an obstacle to contributions within the framework of European society.

Mr. Minister, for having had some contacts with experts after the vote on the report in the Finance Committee, I think it would be good if you could clarify quickly, and if possible even today, some technical aspects of the project concerning the method of accounting for the unavailable reserve, provided for in article 205sexies of the CIR in project. Secondly, it would be useful to clarify as soon as possible, if not now, the definition of the net tax value of shares and shares to be deducted from the calculation basis for the deduction for venture capital. Finally, it is also necessary to clarify the nature of the buildings excluded from the basis for calculating the deduction.

I would like to express, as others do before me...

Do you not think that this makes a lot of things that still need to be clarified?

No, these are things that the Minister is able to clarify and clarify quickly. You will be interested to listen carefully to what he is going to say.

I do not doubt the Minister’s ability to answer some of your questions. However, I am surprised at the progress of the work since we had a discussion in the committee and amendments were proposed. I hear your talk and I know enough about the technique: there are still a number of things that need to be clarified and that may not have been the subject of unanimous agreement among those behind this bill.

Mr. Nollet, in areas such as these, when one realizes that some may not have well grasped the interpretation to be given to certain provisions, one makes a service to everyone, the community, the colleagues of parliament and the government by asking the latter to clarify, during the parliamentary debate, certain things that can currently constitute, or which would otherwise constitute, shadow zones.

Our goal is to have a debate. We do not want to repeat what has been said. It is also not our intention to make the well-being-yes. I still have the right to freedom of expression. I can very well, despite the appreciation that I have for the minister and for the work of the government in this matter, ask for some clarification. This will avoid some misunderstandings later on. This can only help to give a strong and clear picture of this project that is extremely important for our economy.

I am delighted to see that there is at least one person in this assembly, regardless of the minister, who is listening to me today. I would like to thank you, Mr. Nollet, and also the President.

That said, Mr. Nollet, I may still bring water to your mill. I regret that the majority – of course, a majority is called to compromise and govern, this is the art of the possible – has not been able to obtain a consensus within this parliament on a necessary easing of the so-called unavailability clause. I regret that, in order to benefit from the deductibility of notional interests, it is necessary to keep in reserve for a fairly long period the entire deduction for venture capital, namely a period corresponding to the taxable period and the three years following it.

The unavailability clause contained in Article 9 of the project reintroduces a form of discrimination, however, between the two modes of financing, venture capital and borrowed capital, and this paradoxically in relation to the aim pursued which is to ensure equal treatment between the two modes of financing. The shareholder is forced to immobilize for at least 4 years and is therefore again penalized in relation to the technique of borrowing, but I know that this is a compromise. It is better to vote for this compromise – which I will do, by the way, with conviction – than to block the project by ⁇ wanting more and better. Nevertheless, when taking measures to encourage investment in the economy, to stimulate economic activity, it is better to take clear and clear measures without resorting to elastics.

In this case, it is a pity that some, Mr. Massin, could not accept a compromise in this matter. With the force of giving with elastics, we are a bit in the situation of the guy who makes jumping at the elastic, who never lands and who, if he does, breaks his mouth. In the future, we should rather try in this country to take clear, clear and frank measures, Mr. Viseur.

But I will not be pessimistic. This project brings a lot of things. As I am a perfectionist like you, Mr. Nollet, I would have hoped that he would have brought more, but he already brings a lot. That is why this law, when voted, may one day, on the basis of an objective assessment of its actual effects, be amended in order to soften Article 9 and shorten the elastic with which this yet important advantage was granted.

In the meantime, the MR group believes that it is better to grasp this and vote this text yet very positive for a large number of enterprises and SMEs.

Despite the few reservations I have just made, a big step forward is being made through this project; that’s why the MR group will vote for it with a lot of conviction.

June 2, 2005 | Plenary session (Chamber of representatives)

Full source

Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker. The proposal to introduce a tax deduction for venture capital was the subject of an extensive discussion in the Committee on Finance. You have already been able to formulate this from Mr Tommelein’s magnificent report. Their

This draft indeed deserved the necessary attention in the Finance Committee because it is profound, because it is important, and because it is, according to some, even revolutionary. It was indeed worth dedicating more than one meeting to it, apart from certain phone calls that might have caused a different impression. Their

I myself limited my speech in that committee to two sentences. This was in very strong contrast to the numerous redes or lectures from the opposition. I said that I was happy that this proposal was finally on the table and that the sp.a-spirit group would enthusiastically support this proposal because it is so beneficial for business. Their

Mr. Minister, you may remember, these two sentences are of course peanuts compared to the long statements, or I must say lectures, of our colleagues of the opposition. They found it necessary and useful to point out all that they thought was going wrong in this country, all that aroused their frustration, all that seemed negative and destructive. Their

Colleagues, however, we have here for us a bill that is indeed substantial, that is indeed important and that is indeed even revolutionary. Their

Colleagues, however, we have here for us a bill that allows the business and therefore the employers and therefore the workers and therefore the trade unions and therefore the citizens and therefore the people to be happy. Their

Colleagues, however, we are talking here about a bill that, once adopted, will allow us to significantly boost economic growth in these economically indeed difficult times thanks to healthier enterprises that are able to invest more and create additional jobs. Their

Colleagues, this law, I want to repeat it, ends the discrimination against equity financing. Their

Colleagues, this law, and that I would like to add to it, shows evidence of common sense. This law reduces the tax pressure on companies and that is important. It does not do so as a gift to the enterprises, even though there is nothing against it, but because it is a substitute for sustainable employment and even for the financing of the social security system.

After all, by increasing the opportunities for profit reserves for companies, the strengthening of equity is enabled, which leads to more financially stable companies. Through improved profit ratios, the investment potential of the companies is increased. Through a lower income tax, the profitability of individual investments improves remarkably.

Spirit is pleased with the proposals. Spirit is pleased with such proposals. Spirit is pleased with the opportunities it offers to companies and contributes to more employment. It must therefore be a moment of my heart that I regret the long-term negative comments of some colleagues of the opposition, who themselves so much like to float with proposals in this regard. I regret such destructive reactions. If necessary, philibusting on the proposal; if necessary, citing that everything was too little too late; if necessary, during the discussion and reporting before such a positive proposal could reach our forum. However, the proposal is constructive and positive for companies, for job creation and for anchoring.

I regret this method. In contrast, I can only say that spirit is pleased with the proposals, which she will enthusiastically approve. In a progressive angle, the proposals are considered genius in their kind, because, partly because of their simplicity, they are almost too beautiful to be true, but more so because they can promote business growth and employment, because they can stimulate entrepreneurship, because they provide additional opportunities to numerous companies, because they can increase the financial stability of companies, because they can stimulate the engagement of business leaders and even, although this may not be our first concern, because they can alleviate the pressure on the financial institutions. Mr Tommelein also pointed out this.

As left-liberals we stand for freedom, responsibility, connectivity and equal opportunities. In that framework of thought, the present draft provides answers to some of our questions and considerations. We are convinced that the notional interest withdrawal actually encourages companies, encourages them to anchor here and not to deviate, and coordination centers provide lasting opportunities to work in this area.

We are convinced that thanks to the notional interest deduction, the Belgian stock exchange will experience positive effects of this method. We are convinced that the return effect will outweigh the fact that companies will pay less taxes. Therefore, we are positively opposed to these proposals and call for an end to negativism, to the contrary, to the destructive. Their

Within the framework of "no fear, but dare", we would like to support this draft law with pleasure and peace of mind. In response to many companies, many SMEs, many employment opportunities, we would like to say “yes” to this proposal, even though the tone of “no” or “no” has been given priority these days. I would like to thank the numerous attendees for their unwavering interest.

Mr. Speaker, Mr. Minister, Dear Colleagues, I am really happy to speak now, and not for today or for the coming weeks; I attach great importance to the fact that what I am going to say will be taken back in the annals and I give you an appointment to all, in a few years, for the effects of this project.

This project contains good things and others much more disturbing; the future will divide them. Madame Roppe, I do not have your enthusiasm because, on the budgetary level, there will come a time when we will talk very clearly about all this.

The first reflection. If we wanted to give a signal to our companies and foreign companies wanting to invest in Belgium, in the liberal line - still expressed recently by Mr. Bacquelaine — according to which the lower the tax rate, the more the tax returns, it was extremely easy to take a simple step, namely to lower the ISOC tax rate.

The measure would have been clearly visible and easy to express, with the Belgian corporate tax rate becoming, for example, 24%, 23% or 22%. Everything would have been clear, visible to all and, on the budget level, it would have had a positive effect. The consequences were really controlled because they would have been calculated on the basis of the current income of the ISOC and it would have been known that there was no variation.

We prefer to make it complicated, whereas we can make it simple. This notion of notional interest was invented, which begins with an excellent intention. In fact, companies are faced with the choice either to have own funds, or to resort to the capital market, or to borrow.

If they resort to the capital market, it is the uncertainty of the market that determines profitability; no one has criticism in this regard. If companies use capital through borrowing, they pay a interest rate. If they bring their own capital, there is no particular profitability for them.

We are very broadly and, as far as I am concerned, quite unanimous in saying that SMEs are the companies where the share of equity is the most important and most determining in the evolution of society. We all know that a small or medium-sized enterprise is made up of people who not only invest as individuals but who invest at the capital level because they do not have easy access to the capital market, because they cannot borrow or then at relatively high rates. by

When I look at the situation of corporate equity, I find that in 2003 the total amount of SME equity amounted to EUR 43 billion. These equity funds clearly respond to the definition: they remain in the company for a long time because it is where there is the least movement of capital and the amounts are regularly reinvested. by

In the absence of a reduction in the corporate tax rate, which was ⁇ politically incorrect, if the measure had been used explicitly targeting SMEs, not only was there nothing to say but it was in the line of the investment reserve and it was a favorable measure. If we really want to say that we need to restore equality between equal capital and loans operated by companies to finance themselves, there is a weakness in this text. For SMEs, the ten-year Euribor rate +0,05%, is much lower than what is paid by the company to supply itself on the capital market.

As for SMEs, the only thing we can regret is that there is only 0.5% more than the OLO rate at 10 years. The unavailability clause is really not a disadvantage, since it is SMEs that keep capital in the company for the longest time. Furthermore, it could have been ensured that it was the contributor of own funds who could deduct his contribution from the tax of natural persons. You could also choose to leave it in the company. This is the side, not only acceptable but desirable of the bill.

Now to the other beneficiaries. First of all, it must be said that in the case of large companies and top SMEs, with the most important activity, the measure is ⁇ poor and does not have much effect. The adjusted equity of large companies is slightly less than €5 billion, given that they are companies that have a lot of holdings, own shares and shares. At that level, the effect is far less than a reduction in the ISOC tax rate would have been. Therefore, we cannot say that we are going to please large companies, by measuring that although it is these large companies that, like small and medium-sized enterprises, create jobs, it is they that could have benefited from a measure.

When a tax measure is taken, it is always necessary to reconcile the desirable and the sustainable. In this case, the sustainable is not achieved in two cases. Madame Roppe, I am surprised that you did not pay attention to this aspect. Who will really benefit from this measure? The companies that are the most capitalized, which have the most equity, including the coordination centers that have 143 billion equity. Fortunately for the effect of the measure on the state budget, they pay only about 94 million corporate taxes. They will not pay any more!

This will be a huge gift to the coordination centers. I have been and am still a supporter of coordination centres because at the time they were established there was a damaging climate of extremely intense tax competition within Europe. If we adopted this measure, it is because we considered it necessary to establish these coordination centers to defend ourselves against harmful measures for certain Belgian and foreign companies established in Belgium. However, there are two conditions. First, so far, the coordination centers do not pay a lot of taxes but still pay a little: 94 million, it is ridiculous in relation to their capitalization but it is still 94 million euros of taxes.

Secondly, by adopting the coordination centers, special conditions were imposed on them in terms of employment. These conditions will completely disappear by 2010. Indeed, as the provisions relating to these obligations, which are imposed on the coordination centres, approach the end, the obligation to maintain jobs and thereby create added value at the level of natural persons disappears. That’s where I say we’ll see in two, three or five years. I am convinced that most coordination centers will keep their capital in Belgium and will even increase them, that profits will be transferred from other European countries to these coordination centers but that people will be elsewhere since there will no longer be an obligation to maintain people.

I think the measure in favour of the coordination centers is useless because they will anyway send their staff to other countries. It makes me very uncomfortable at the European level. Like all other European countries, we are committed to dismantling damaging competitive corporate tax mechanisms. This had been done because we were in an absurd situation that led the states to engage in such tax engineering that they were constantly competing in corporate tax and weakening the state’s resources. For people who have a sense of the role of the state in society, coming up with systems that weaken the state compared to multinationals is not normal. In addition, it makes the tax weigh on people who cannot move, who cannot transport themselves.

This week is not a good week for Europe, we are all convinced of it. Some people vote “no.” I think that a measure like this, which was explicitly perceived abroad as favouring the maintenance of a tax mechanism that is damaging to neighboring countries, is not a good thing, it is not a gesture of a convinced European. All of this fuels, outside of the political class, the idea that Europe is really a very strange game where everyone makes a hook.

There is also a second element. To say that tomorrow, the coordination centers that already paid relatively little taxes will no longer pay any more, is to say, in a rule of law, which advocates equality before tax, that this equality is reserved for others and not for multinationals. I am surprised that a number of parties consider this to be absolutely natural. These 94 million is not very expensive but it is morally very heavy for our country and it will be useless because we will have kept the capital but we will not keep the people.

The last point is to know who will benefit from the situation. Some companies need significant equity because it is the counterpart, in the name of Cook ratios, of their obligations when they lend. These are banks and, in addition, insurance companies.

In the current state of banks and insurance companies, their corrected equity amounts to respectively 17.356 billion for banks and slightly more than two billion for insurance companies. The entire tax policy of the last 25 years has been to subject banks and insurance companies to a tax regime applicable to other companies. This sector has undoubtedly not become dangerous in recent years. It has not had and does not need any special push because it is flourishing. It can grow, it has a captive customer base and it has perfectly europeanized itself.

I disagree at all with the numbers submitted and I thank those who requested their appearance in the report because this will allow for a good comparison. On the banking sector side, it will not, at the current rate, be 71 million that will be earned by the banks, but much more. According to the calculations that have been communicated to me, this amount will exceed 200 million.

Taxation must reconcile the desirable and the sustainable. It is desirable to promote SMEs. It was sustainable to provide for measures in their favour. It was neither desirable nor sustainable to give such gifts to banks and coordination centers.

That said, this is the situation based on the OLO rate today. If I take this rate by referring to the average for 2004, which is at 4.17%, the figures increase significantly. If I consider the average rate of OLOs in the past ten years, which is 6.45%, I find myself facing a real crazy train in the fog. And we are, in this case, still below the 6.50%, the amount from which the government can intervene. by

When I consider the reference curve of OLO rates over ten years, I estimate that one who would say that we will stay at the rate of May 2005 would make a pretty crazy bet. It may last for 1 or 2 years. We still have real historical data. by

It is true that in December 1989, the OLO rate reached 11%. We will not find this figure, I think, because we are controlling inflation.

However, to claim today that the measures, which are taken and calculated on the basis of an OLO rate of 3.5%, will be permanent for the next 5 to 10 years, would be a totally crazy bet. There will come a time when the cost of the measure will exceed a billion euros. At that moment, I don’t know if you will always be as happy, Mrs. Roppe. Don’t be surprised if the one who earns 1,500 euros a month and pays a 30% tax on the personal tax turns to extremist parties believing that the role of the state is only to favor one or another system.

We will not vote against this text, but we will abstain for two reasons. First, because in the case of SMEs, the measure is compatible with a normal policy, a good policy in favour of SMEs. We therefore support this aspect. But we also abstain because we take date for the future budget of our country. One day we will see the consequences that result from a measure that is taken under conditions that unnecessarily favor two sectors of our economy and that, due to the likely increase in the coming years of the average OLO rate, may cost the state budget extremely expensive.

Mr. Speaker, Mr. Vice Prime Minister, dear colleagues, it is with lucidity and loyalty, based on a consensus reached within the government, which is based on the elements that have been presented, which are function of a solution established in the principle of budget neutrality, that our group comes before you to support this project that aims to make the investment consented by companies on their own funds as taxally attractive as those that they make by borrowing.

Lucidity, because our country cannot take the risk of seeing its economic activity disabled in the face of its main competitors. We must, in a context of altered European construction, be ⁇ alert to reasons that could weaken our position in the future. I think we would not be forgiven. This apparently complex mechanism, ⁇ in terms of its designation as notional interests, will allow an additional choice in the range available to companies to respond to violent fluctuations in markets, in particular that of the lease of money.

This measure has as an important objective to address small and medium-sized enterprises, which are, it should be recalled, the guarantees of the healthy economy of tomorrow, this type of enterprises being in fact the largest vector of job creation and economic growth. In this regard, it is not unnecessary to point out that not far from half of the budget impact — EUR 211 million out of the 476 million planned — of the tax deduction for venture capital is allocated to small and medium-sized enterprises. With for us, and the socialist group has on this point a very firm position, the corollary of guaranteeing employment. While this reform is to generate profits, and we have no doubt that it will generate profits for the companies concerned, the maintenance and creation of new jobs are the only things that matter to us. Because although this is not a deduction on new own fund contributions or a deduction for investment, we are convinced that the funds released will be used for investment, employment, and value creation.

The corollary of this measure is the elimination of redundant benefits such as the deduction for investment at the base rate as well as the tax credit. Furthermore, we advocated the maintenance of the tax advantage within the company for as long as possible in order to guarantee the objectives I just mentioned. It is with these objectives at the forefront that we support this project, which also guarantees the legal certainty of the coordination centers which, in their time, were due to their existence only to the express guarantee of a minimum level of employment, employment which we want to see also guaranteed for the coordination centers that will survive to this legislation.

After the reforms aimed at easing the burden of taxation for both individuals and companies, the single release declaration and now the project that occupies us, a number of voices have risen to denounce what the Anglo-Saxons call in particular the "race to the bottom", in other words, the race at least taking, taxally is understood. Making every effort to ensure that our economic fabric does not suffer the competitive advantages of tax dumping is not only politically desirable but also fundamental in the context of European construction and the safeguarding of our social system. It would not be the same if the reforms were intended to drive the country into a detachment surcharge, synonymous with structural problems, to finance the volunteerist policies that we want, with the government and within the framework of the government agreement, to see carried out.

We are not, however, naive because this measure is not without risk, which some during committee discussions have not failed to raise. But what measure does not contain in itself its share of legitimate hope but also its lot of potential disadvantages? We have long discussed in an ad hoc committee the likely budgetary implications.

Please allow me to emphasize, Mr. Speaker, Mr. Deputy Prime Minister, Dear colleagues, on the notion of probability in this matter. Indeed, in this honorable assembly, one often plays the game of predictions but no one would risk predicting the future, playing the Cassandre even if their song remains present. If you believe the figures presented to us, the impact of the reform of the deductibility of venture capital would be painless from a budgetary point of view.

Some have tried to instigate doubt in the majority, in vain in the end because the differences in calculation that have been presented are purely methodological and of anticipation of reference rates, which inevitably lead to divergences of budgetary impact. Therefore, nothing allows us to question the figures that were presented to us. However, this did not prevent us from asking the Minister - which he obviously did - the most serious assessment taking into account the current state of knowledge of the economic context, assessment whose results are an integral part of the report.

We also want to reaffirm with force that, whatever tomorrow this economic reality, the measure can in no way question the policies we defend and support with strength and conviction, this deductibility must remain, within the limits set by the project, budgetally neutral.

I said “lucidity, loyalty, finally” to the government agreement and the commitments made within the government. Loyalty: Mr. de Donnea, you told me that we did not go further, I am pleased to have remained loyal to an agreement that was negotiated within the government and I will be pleased with it rightly since it was negotiated based on budget impacts, economic criteria, investment and employment relevance and I believe that all measures were weighed. In this context, it seems to me that it is rightly left to this government decision. This was what I had specified from the beginning when I spoke in the Committee on Finance and Budget on the general exhibition, saying that it seemed to me that it was a balanced project and that we should stick to this balanced project without going further, since everything had been taken into account and had been negotiated.

One of the mentioned measures could have been considered, another measure could also have been, but it might not necessarily have satisfied the other party. We must remain loyal and we remain loyal, loyalty that we hope shared.

I don’t blame you for not being loyal. I only believe that this measure would have been much more productive if, within the government itself, your party had allowed to go further. I regret that it has not been possible to bring your party further within the government to obtain a clearer, more frank and clearer measure that would have created – and that is what you and I also want – more jobs in our country.

Within the committee, I acted like you and others, I at least tacitly, that there was an agreement. I have not asked to question this agreement. However, as a free parliamentary to hold statements that correspond to what I believe, I can regret, while thinking that this project is a major advance, that because of your party, it has not been possible to go further and reach a more frank and clear measure.

That’s why I allowed myself to compare you to an elastique jumper. Sorry to me.

Mr. de Donnea, if you allow me to, I do not believe that this is not a matter of jumping to the elastic. If one is considering a measure and asking for budget neutrality – as with many other measures – when one wants to go further, one must remain in the principle of budget neutrality. At that point, it must be real, and I do not necessarily believe that we have gone so far.

Furthermore, when certain measures and certain developments are on the table, it is clear that there may be others and that one can go to other advances, but which are not necessarily met. At that moment, we can understand each other.

Mr. Massin, you speak of "neutrality" as if it was a guarantee you would have obtained. I remind you, and it is stated in the report, that while the minister recognized that there was compensated neutrality for this year, he has absolutely not guaranteed it for the years to come.

I can do that, Mr. Nollet. If you allow it, I will finish my speech.

I was talking about loyalty, which we hope shared, knowing that most of the tax reforms contained in the government statement and the decisions of the Extraordinary Council of Ministers have already come into effect.

I will spare you the long list of these measures, but I will nevertheless mention one of them that holds me ⁇ close to heart; I mean to speak of the removal of the titles to the bearer, measure which was an integral part of the government declaration of July 2003. This reform was to be implemented in parallel with the entry into force of the Savings Directive next month. I do not doubt that the government will soon present a project that can meet this goal. We will remain ⁇ attentive to the loyalty that is also required in this context.

Finally, given the assessment of the budgetary impact of the measure, based on the parameters that I highlighted in my speech – and I come to this budget neutrality, Mr. Nollet – we would like to be associated with a monitoring that the competent minister will not fail to put in place. This monitoring is indispensable because, at the risk of repeating me, this measure must be budgetally neutral and not be a source of mortgage for the other government commitments.

Finally, the questions asked by Mr. from Donnea on how to account for the unavailable reserve, the net tax value of the shares and the buildings that are excluded, in my opinion, these are technical problems that have already been discussed within the government and have been resolved.

The method of accounting for the unavailable reserve must be submitted to the Committee of Accounting Standards. The net tax value of shares is a technical issue; this provision is intended to avoid double counting of fees and charges. As for the buildings that are excluded, another technical problem, it is the buildings from which a person draws any profit, whether a rent is paid or not. These questions are no longer raised since the answers have already been given.

Mr. Speaker, Mr. Minister, Colleagues, it was already in the Federal Policy Declaration of October 2004 that the Prime Minister announced, probably given the country’s ever-depleting economic credibility at the international level, to take an initiative to avoid, among other things, the withdrawal of the existing coordination centers, by ensuring that the country remains attractive to foreign investment. This was the beginning of the introduction of a tax deduction on venture capital.

After the months-long statements in the media, we have had to wait until May 11, the date when the government submitted the draft to the House, with the request to deal with it urgently, whatever happened. There would and should be a signal to foreign investors – the hearing with the US Chamber of Commerce a few weeks ago was a first indication for that – if necessary by dealing with, discussing and approving the present bill at a meeting of the Finance Committee, in which the chairman of the committee was heavily pressured by the Cabinet of the Law Street 16 to push the bill with the karwats by the committee. It was with the help of value colleague Tommelein that we were able to handle the design in an orderly way, not that we had a lot of time left, but it was already a little more spacious than that one meeting.

Over the coordination centers has always hanged a certain mystery. Moreover, since its inception in 1982, the entire arrangement surrounding the coordination centers has been under the guise of the European Commission, because the favourable tax regime was in conflict with European state aid regulations, in this case through a fiscal statute. Moreover, the tax-friendly status of the coordination centers has changed a lot in recent years, including under pressure from the European Commission, through restrictive measures.

What is the economic impact of these coordination centers? The total employment is estimated at approximately 20,000 people, of whom slightly less than half work directly for the coordination centers. In 1999, there were 8,477 people. The rest are indirect jobs.

As regards the tax impact, it must be noted, however, that the Belgian system has remained ⁇ advantageous, as the profits of multinational companies, primarily derived from the management of financial flows within a multinational group, are largely exempt from tax. The calculations carried out by the Planning Bureau show that the average effective rate is approximately 2%. I am based on the Vandenhove study on direct investments abroad and the 2001 study on direct investment flows from and to Belgium.

Compared with the current standard corporate tax rate of 33.99%, this is indeed a significant tax advantage. This also appears to coincide with the reality, in the sense that in 2002 the total profit of 207 coordination centers amounted to almost EUR 5.4 billion, of which in total only EUR 75 million were taxed. Assuming that the standard corporate tax rate of 33.99% would be applied to the profit of 5.4 billion euros, the tax authority would have an additional income of 1.84 billion euros through corporate tax. In 2002, the total income from corporate tax in this country was just less than 8 billion euros. The abolition of the enormous tax advantages of the coordination centers could therefore lead to an increase of approximately 23% in the corporate tax revenues. The strange thing is, of course, that this government does not speak a word about it. Their

But it is true – and I fully realize that – that the failure of the favorable regime of coordination centers can have various opposing consequences. On the one hand, it could lead to the departure of multinational companies, resulting in a decrease in tax revenues. I can only note that at present the exit of the coordination centers to Luxembourg and Switzerland is already in full progress, without affecting the current fiscal favourable regime. In that regard, I refer to the commentary of Forum 187, the association of interests of the coordination centers, on the effects of this bill on the functioning of the coordination centers. I refer to the article that appeared on this subject in "The Time" of Saturday, May 21st, under the title "Notional deduction concerns only a minority of the coordination centers". On the other hand, if more companies and therefore also the coordination centers set the standard rate, this would lead to higher revenues. This could create the budgetary space to further reduce the standard rate from 33.99% to 27%, which in turn could attract more companies and give this country a new impetus in terms of international economic credibility, which could drastically strengthen its competitive position.

The European Savings Directive, together with the exhaustive nature of the recognition of the coordination centers by 2010, has made this government have to come up with something. Hence the alternative to the introduction of the tax deduction for venture capital, which is thus the subject of the present bill. This means that all companies can charge a fictitious cost price for their own assets from the financial year 2007, i.e. for the income of 2006. It is undoubted that with this scheme the entrepreneurs get a backstop because more equity can be invested in the company, which in addition reduces the tax difference in treatment between own and foreign assets.

Currently, however, companies can only deduct the interest they pay on their foreign assets. An equal treatment between own and foreign assets will at least improve the solvency ratio and as such the financial health of many companies.

However, there is also a link to this bill. The entire scheme of investment withdrawal should not cost the government a cent. The new tax benefit operation must be budgetarily neutral, a technique that the government also used in the year 2002 when reducing the corporate tax from 40% to 33% + 3% crisis contribution. In practice, this has led to a wider taxable basis. This means, in practice, the abolition of several existing tax incentives. As regards the introduction of compensatory measures, it is a total amount of 656 million euros or 22 billion francs.

As for compensation, Mr. Minister, you provided us in the committee a sort of synoptic table with six compensation items. The first compensation item was about the abolition of the tax credit of the companies with which you think to raise 17 million euros together. The second compensation item concerned the savings on the investment reserves, which you intend to raise 60 million euros. The third compensation item is the abolition of the investment withdrawal of the companies, amounting to EUR 41.3 million. The fourth compensation item is the anti-abuse provision, the notional interest, among other things through the villa companies, amounting to 53,6 million euros. The fifth compensation item is the return effect, a classic closer of a table. If one no longer knows where to find the difference between expenditure and income, one provides for the return effect. A classic liberal trick of 57.6 million euros. Finally, the sixth compensation item, the amendment to determine the tax surplus values by taking into account the net sales price instead of the gross sales price, amounted to EUR 336,5 million.

Colleagues, if we take these two final posts into consideration, 57,6 and 336,5 together is about 400 million euros on a total of 566 million euros. That is about 70%. The question is how these two amounts are determined. Of course, it is easy to speak of a return effect of €57.6 million, but it is not clear how it was calculated and based on which elements. It is also unclear how the 336.5 million was calculated. Furthermore, it is not clear in what way the separation occurred on the personal tax and the corporate tax.

Mr. Minister, if we were to face the detailed calculations, we could conclude that 72% of your compensations are therefore, in my opinion, very questionable.

So it is all about a budget-neutral measure, a vest-pocket-pocket operation, in the classical sense of the word. This also means that companies will be better off. However, there may also be companies that get worse from it. Therefore, from the beginning there was quite a bit of criticism from the mid-employment organisations on the abolition of the investment reserve. This affected mainly SMEs, which usually have no or a weak equity. In our view, therefore, it has made sense to allow the investment deduction to exist in addition to the notional deduction system. As such, small SMEs are left to choose between the system of investment deduction or the notional deduction. So I think it was a good thing that there was an adjustment.

Since the whole measure was aimed at the coordination centers and multinational enterprises, the whole scheme of the tax deduction for venture capital is, in my opinion, more aimed at large enterprises than on the average SME in Flanders. Indeed, the benefits of the notional deduction will benefit in particular companies that have a large amount of equity in absolute figures. In other words, especially capital-intensive companies benefit from this, but most SMEs in Flanders are labor-intensive.

Given the choice between the investment withdrawal and the notional deduction, as well as the fact that in these bad economic times it makes no sense to sit down, I believe that the notional deduction scheme should be given a chance so that entrepreneurs have more oxygen at their disposal. Consequently, the Vlaams Belang group will abstain from voting.

Mr. Speaker, Mr. Minister, the least we can say is that, despite these interesting, productive debates - at least I hope - in committee and in plenary session, it must be acknowledged that it is in a relative external indifference that a debate is currently taking place in the House on one of the measures that I consider, like many others without doubt, among one of the most important measures of the legislature.

This is an amount of over 500 million — you estimate it at 566 million euros to date — which is at stake. If this is not the biggest measure, it is in any case one of the biggest measures, one of the biggest decisions with financial impact of the violet government.

I say this also for those who make sense or hope that other measures with a similar impact could, could, should still be taken. Should I remind them that the prime minister said a few days ago that a second budget adjustment would be necessary and that the figures mentioned today lead us to think that this adjustment should concern about 1 billion or 1.5 billion budget restrictions?

Before you vote just recently, maybe you will also think about this effort, this difficulty, this problem that will one day have to find an answer. And I have only cited the figures of the adjustment number 2 for the year 2005; I could also cite the figures of the 2006 budget, with a predictable hole, without other measures, of more than 3 billion euros.

Of course, it will be said that it is related to the conjuncture, to the reversal of situation. This is true, but it is always that you will have to take delicate positions. by Mr. Massin and your colleagues in the government will have to take difficult positions, carry out painful arbitrations. Today, however, a sort of white cheque is offered to proposals that are, very logically and even legitimately given their program, supported by the liberal parties.

You know that money is rare. You’ve already said that arbitration needs to be made, that it’s never easy, but I don’t quite understand the words and what you put behind the words you used: loyalty, neutrality and lucidity, you said. I will return to it during my presentation.

Mr. Massin, I will primarily address you because I dare hope that you will be a little more sensitive to the arguments I will develop.

First, it is said everywhere, whether it be at your home, in your tribunes, in your writings, in your speeches or in the academic world, that what needs to be done is to reduce the cost of labor. This reduces the cost of capital. Where is the coherence, where is the logic, especially when a budget of 566 million is devoted to this project? What can be done to reduce the cost of labour? Experience shows us that only a reduction in labor costs can help boost the economy and employment. Here, obviously, only capital is subsidized and, as our colleague Mr. Viser, the cost of capital primarily for large companies, those who have the capacity to mobilize this capital, those who have the capacity, especially through international constructions, to repatriate to us capital currently used elsewhere.

Mr. Speaker, I must say that I am surprised by the discourse of my colleague Nollet.

There are examples. I refer to a number of countries in Scandinavia that are socially-economically ⁇ progressive. We regret that they have a ⁇ high tax burden there, but in countries such as Sweden and Denmark the effective corporate tax is well below 20%.

He talks about substitution, labor and capital. But in some Scandinavian countries, which are ⁇ social, there is still a ⁇ low corporate tax. I think the two are compatible. I do not understand his argument on this point well.

Mr. Speaker, I do not want to open the debate on the comparison between our system and the Scandinavian systems. Of course, the combination can be mentioned between capital subsidy and employment subsidy. I essentially say that at the time when budgetary difficulties are pointed out, in particular with regard to the difficulties of economic relief, to the budget adjustment (1.5 billion will be needed, 3 billion in 2006), at the time when we are facing these numbers and close deadlines, what does the government do? A choice in an investment that, in my opinion, is not a priority.

One could imagine a general reflection on another model, for example on Scandinavian models because they have high social protection criteria. But admit that here, there is no overall reflection. This is a measure taken at a time when a series of other restrictive measures must also be taken. And do not tell me that in one, two or three months, when the situation will need to be evaluated and action taken, you will support the back-to-back against this project that costs a third of the effort that will need to be made as part of the adjustment.

I will return to my reasoning by developing a second point. You mentioned, Mr. Massin, the “neutrality” aspect. I asked you about this before, when you were at the tribune. Let me tell you that you did not answer the question. What guarantees do you have today that neutrality will be effective and that the mentioned compensations will be sufficient? As one of your colleagues said, none! Should I remind you that, during the previous corporate tax reform, a section of the law, for which we have all fought, provides that an assessment of the previous corporate tax reform must be organized by the Court of Auditors. Do you have this assessment of the neutrality of the previous reform? At this stage, no.

However, the Minister of Finance and the Secretary of State generally refer to this assessment. I mentioned it in the committee. I contacted the Court of Auditors. Contrary to what was already mentioned, a few weeks ago, by the Secretary of State, this assessment will not be ready in 2005. As early as 2006! Today, while the previous reform was to be evaluated by the Court of Auditors — this was one of the guarantees you wanted with us — it is not. You can assure us in the abstract that this will also be neutral. I am not consistent in this regard.

There is even a bigger problem that, in terms of loyalty, could be used if you wanted to. You were careful — and this is a good thing — at the time of government formation, that tax reforms can only come into force after they have been assessed, in their impact, neutral on the basis of previous reforms. This government deal could help you today, asking your partner to wait. But obviously you are not using this government agreement. You do not use the loyalty that you are entitled to ask them in return while this opportunity was offered to you on a money plate. Why give in this way, when the government agreement you negotiated was in your favor? This is the image used by Mr. of Donna . We are actually in front of an elastic that you make up and down again. Don’t be surprised if, at some point, people take you for a real “yo-yo”.

The cost of this reform — I am not the only one to say it, the minister indicated it in the committee — is estimated today, according to today’s rates, and compensated entirely by his calculations — which I personally put in doubt — at the height of 566 million. What compensation guarantee do you have for tomorrow, afternoon and later?

Our colleague, Mr. Viseur, recalled the evolution of OLO rates over the last ten years. What guarantee do you have that if these rates increase and therefore if the cost of the measurement increases, you will still have neutrality? None of ! You say yourself that you hope that you can be demonstrated that the operation will be neutral. This must be neutral and we will pay attention to it. Today we ask you to say that this reform is neutral, that it is compensated. But this is not the case.

Furthermore, I regret that, in the law text that is submitted to us, no guidance is given as to how companies should affect the money offered.

Mr. Bogaert, you were, I think, in the committee when we discussed with your colleagues the amendment - "minimal", as I called it - which could have guaranteed that the companies that will benefit from those 566 million do not reduce their jobs in Belgium. This amendment has not been adopted. So, let’s not come here to talk to me about neutrality, guarantee of employment since this is not possible and that an amendment, which aimed at inserting this guarantee in the text of the law, was rejected.

Here we reach the limits of the consistency of the discourses on progressive banks.

If, with an offer amount estimated today at 566 million euros, we cannot guarantee that the companies that benefit from it will, at least, maintain jobs, not to mention an increase, I repeat, we are reaching the limits of consistency!

Should I remind you that the entire government has committed to a goal of creating 200,000 jobs? In a committee, the Minister of Finance took his distance from what I believed to be the right interpretation; he said it was not a goal of creating 200,000 new jobs. Creating 200,000 jobs, you will ⁇ do that! There is no doubt! But the goal as presented to us by the government was indeed the net creation of 200,000 jobs. I am holding a scoreboard of net job creation. Mr. Minister, I would find it interesting to be able to evaluate this objective regularly. by Mr. De Donnea asked the Minister for a series of clarifications. It would be useful that he expresses himself on the minimum guarantee of jobs, unless – and I would perfectly understand this in the logic of the ongoing discussion – that he refers to the guarantees that his French-speaking partner of the majority could give.

Another highlighted element is the fact that the effect of this measure can be reduced to an abuse effect; within a group itself, capital currently located elsewhere is transferred. In doing so, this bill favors or supports relocation.

Of course, when this relocation is unfavorable to us, we scream and climb walls, but when it comes to ensuring that our own provisions do not promote fiscal or social, sometimes environmental dumping but this is not the case in this text, we prefer to close our eyes. Is this the loyalty you referred to here in the tribune, Mr. Massin? I cannot share it.

I submitted an amendment which, either, was not supported; it was aimed at ensuring that the tax subsidy of more than 500 million euros that we are going to offer is devoted to companies that invest new financial masses in our economy. This amendment was rejected as well as the others. This means that, concretely, we will subsidize the investment already existing today rather than an increase in capital investment in our country.

I think this is a very bad choice. Of course, it is necessary to support the economy fiscally; of course, it is necessary to give impulses. But why not choose to reserve those amounts to those who will increase their capital in Belgium? I have not received any clear answer from you to this question, which is the only one that would prevent the effects of aubaine in relation to the people already present and possibly attract capital.

Let’s get to the compensation component and first the political compensation. It is learned in the press that in exchange, the Socialist Party would have obtained the end of the titles to the carrier. I think I remember that this same argument — and that same political compensation — has already been used in exchange for the acceptance of the DLU. Selling it once at the time of the DLU, a second time at the time of notional interest, when the third time? Continue like this every time the liberals move forward within this government, as they have not stopped doing. It’s not a yo-yo, it’s a starting block.

Mr. Nollet, I want to understand this, but it is true that you are no longer in the government and that you do not necessarily know what is going on there.

It is a fact: we are no longer in the government and indeed, we do not know what is going on there. I would like to thank Mr. He promised to advance the debate. The compensation is uncertain. We have seen it in the discussions in the committee, we cannot number them exactly: we get two figures that seem different. You will admit with me that they are necessarily related to the amount of money that will be repatriated in international construction, which will be used in Belgium and which, necessarily, could increase the cost of the measure. This neutrality that you claim is already present in the text, it is not. There is also a connection with the fact that you have moved from the word "neutrality" to the word "monitoring", which is not the same thing.

I feel relatively uncomfortable about this measure, and that makes sense. This is logical because it is not part of your corpus. You speak of loyalty, but I believe that loyalty cannot be blind and that there is no more lucidity, Mr. Massin, when loyalty is so blind. What this project proposes is a wasting of the last fruits of growth.

Leaving the tribune, I can give you a copy of information broadcast by KPMG, which you know by the other, which already sells the deduction of notional interests and says clearly that this measure, supported by the whole government where we are not, will allow companies to freely decide the allocation to give to the tax economy thus generated, in particular through a greater distribution of dividends to shareholders. If that’s what you want to support, it’s your business!

This is not the only argument that can be used here. It is often said that this measure will favor SMEs, I even hear this statement in my colleague Viseur’s speech. I will read a short excerpt from the white paper of a professor of financial management at HEC Liège: "Can one imagine, even from far away, that the cost of equity is the same for a company" - here, EVS was cited - "that for a stock like Electrabel, which behaves almost like an obligation? In reality, it is the largest and most defensive companies that will get the most benefits from the measure, because it is for them that the gap between notional interest and the actual cost of their own funds is the smallest. The reform disadvantages growing small ⁇ and results in extremely damaging behavior by large companies.” (Georges Hübner in L’Echo, less than two months ago).

Last argument, I pointed out in the committee, but I would like to repeat it here in the public session: this kind of project will make us even more dependent on the evolution of interest rates. We already know, given the weight of our debt, how much, when interest rates rise, the difficulties for the budget are great. Here, not only will spending have to rise – if interest rates rise, the cost of debt will rise – but, in addition, revenues will decrease. The more interest rates will rise, the more OLOs will rise and, therefore, the more the cost of this measure and the less tax revenues will also weigh heavily in the balance sheet.

In conclusion, it is unambiguous that we will not abstain. Our group will vote against this bill, given that the central goal of the project is unfortunately not to support SMEs, which, however, actually contribute to increase investment in us and guarantee employment.

Mr. Speaker, my colleagues, what is presented here is a good measure.

In my view, it is a good measure in principle because it removes the discrimination between foreign assets and own assets in part. Mr. Nollet, it is also a good measure because it essentially means oxygen for companies.

The question is, of course, whether this measure is too little and too late. Is this measure too small in relation to the challenges of this country and our ⁇ and will it come too late or not?

As for the state of the country, I would like to speak first of all about foreign investment. We received in our commission the visit of the United States Chamber of Commerce. These people represent 1,200 American companies in our country. In 1999, for every accumulated euro investment in our country, there were three euros in the Netherlands. In 2004, barely five years later, for every accumulated euro investment in our country, there are now eight in the Netherlands. We go from a ratio of 1 to 3 to 1 to 8. I do not think this is a good achievement.

Second, economic growth in our country has reached the zero point and this not only over the first two months of this year, but also throughout the first quarter of this year.

Third, if we look at the overall socio-economic performance of this government, we must conclude that on a budgetary level in 1999 the balance was virtually achieved. You must honestly admit it. There were elections in June 1999. Until the cabinets had connected their phones in 1999, against the fact that some relevant measure had been taken in 1999, we were already at the end of the year.

I checked it again this afternoon. In 1999 there was a small deficit of 2 billion euros. You will say that this is still a lot of money, and I find a 2 billion euro deficit on a budget also a lot of money. In 1999 there was a budget deficit of 2 billion euros.

When the Planning Bureau says six years later that next year there may be 4.5 billion euros too short, I think we should speak of a status quo on a budgetary level. Per ⁇ it is a prediction. Per ⁇ the government still manages to reach almost zero on budgetary level. Maybe it is so. However, I remain with the assertion that if there was a deficit of €2 billion in 1999 and there is a balance six years later, we can speak of a budgetary status quo.

There is also a status quo. In 1999, we had an employment rate of approximately 60.3%. Six years later, we are still around 60.3%. In terms of tax pressure, we had about 46,0% in 1999. Six years later, we still have a tax pressure of 46,0%. I remember, Mr. Speaker, that at the beginning of this legislature we were given all kinds of nicknames and all kinds of slanges, because we dared to say that global fiscal and parafiscal pressure was a theme. I remember certain quotes from colleagues: “Why do you get rid of that global fiscal and parafiscal pressure now? It is intellectually unfair to use this as a norm." The VLD recently held an animated congress on global fiscal and parafiscal pressure, colleagues. It cannot be other than that the water is really on their lips. I hope it is not too late, but it may be that the proposed measure comes ⁇ late.

Is the measure not too small? Maybe so. We are talking about a total impact of 566 million euros. The corporate tax in our country amounts to almost 10 billion euros. We are talking here about 4 to 5% - all depending on the latest statistics - of the global corporate tax budget. Is this now the gigantic measure with which we will save the country from economic decline: 4 to 5% of the total budget to corporate tax? When you know that the increased advance payments alone are a multiplication of the impact of the measure we are talking about here, then I think that the measure, although I like it – I can rather leave the classical opposition role here – remains very modest.

I would like to address a few questions, which colleague Nollet also asked. Should such a measure be budgetally neutral? Should a measure to help companies be budgetally neutral in relation to the companies? My answer is no. If one wants to help the companies in our country, one should not seek immediate compensation from the companies. The compensation is not there. In a country like Sweden where the effective pressure of corporate tax is below 20%, no compensation is sought from the companies themselves. Compensation is sought in the total employment of the country. It is simply nonsense to start looking for budgetary compensation from the companies themselves for the proposed measure, because what you give to the companies, on the one hand, deprives you of the same companies, on the other.

If it is intended to give the companies oxygen and one has the second highest effective tax pressure in the whole world, then it is still nonsense to say that this measure must be budgetally neutral. It should not be budgetally neutral. The corporate tax should be lowered. If you lower corporate tax, you will automatically find compensation in your budget by the fact that there is more employment, there are more investments and therefore there is more growth of the economy. Their

I have the impression, it is no longer an impression, but I am convinced that the French-speaking liberals and the Flemish liberals in this government are simply under heavy ideological pressure from their coalition partners. That coalition partner says there needs to be more compensation. The measure should normally find its compensation in employment. As a result, this measure is small and therefore the compensation comes into this measure. Their

In addition to the fact that it is a small measure and in addition to the question of whether this measure should be budgetally neutral, I would like to point out whether there should be an employment guarantee for this measure, as my valued colleague from Ecolo argues. He says there should be a job guarantee for the measures. Their

With all respect, but that is nonsense. What nonsense is it that a measure that should help companies should include an employment guarantee. In what decade has such a claim been made in this country and what consequences it has led to that if one wants to help companies, there must be a job guarantee. No, if one wants to help companies, one must count on an automatic revival of the economy, on an automatic revival of employment, of employment. This will help people more than to go looking for a job guarantee. Their

Fourth, should you limit the objective, the yield of such a measure for business? Should you build restrictions, as colleague Nollet suggests, around the fact that you want to help the companies? Do you have to decide what can or should not be done with the money? Again my answer is: No! No, that is not necessary. You should not impose restrictions on any measure that helps companies in that country.

Even in employment?

Of course ! Why should we force companies, if we want to help them, to hire them? I never knew that a region or a country progresses economically when it is compulsory to recruit.

With all respect, but that has been the policy of Minister Onkelinx, for six years: "You get dít, but you have to do that". This is not how it works, neither technically nor economically.

I understand well the reasoning for a company when it wants to do what it wants with its money, that is very good. But here, we will spend more than 500 million euros and we could not even say that at least, this must ensure that the current employment will not decrease overall. Of course, you should not put sticks in the wheels of companies for certain projects that they want to develop but if this money must, in addition, subsidize rationalizations and therefore employment restrictions, I frankly think it is better to do something else with the same amounts.

I simply note that there is a huge ideological gap between the members of this Chamber. There are those who say that if you give something to companies, you should immediately take it back and those who say that if you give something to companies, you must obligate them to something else. That is not my position, that is not the position of our group. This is not economically justifiable, as you say. There must be a global framework and I am not for the race toward zero corporate tax. It is not about that. You have examples abroad. Together with our committee, we can take a closer look at some of these cases. There is no need to be fixed on travel for me: we can do it in the committee. You have to look at Sweden. I’m against that absolutely high tax, but you’ll agree that this is a high-level socio-economic model. Well, there the effective corporate tax is less than 20%. If you tell the companies that you will help them, but then take it back, that’s down to what this government has done with the personal tax. It consists in giving money and taking money, keeping the global tax pressure at the same level, preventing economic growth and improving employment rates. This leads to a status quo. That is what will happen again. Their

Article 9 of the present draft is a purely ideological article, Mr. Nollet and Ladies and Gentlemen of the PS. The liberals want to help the companies, but you do not favor them that they help the companies and so you introduce an article 9 that makes the measure more restrictive. That makes this measure, which is a good measure, more difficult to communicate abroad. Their

Therefore, I cannot decide otherwise, colleagues, President, than by saying that it is regrettable that a good measure is reduced for ideological reasons. It is a shame that some, of the majority or of the opposition, do not see the light and do not understand that in this way one does not restructure an economy, does not help the companies and, unfortunately, does not promote the employment of our population, in the north or south of the country.

If there are no other speakers, I think, Mr. Minister, that you can give us some reactions on these various interventions.

The colleagues sometimes questioned each other, so I think it’s time for the minister to give us his own reading of the dossier.

Mr. Speaker, dear colleagues, I could be quite brief because the speakers interpelled each other, but I thought it was my duty to be present, despite all, during these exchanges that addressed little to the government. But these are things that can happen.

I just wanted to remind you of a few elements. I’ll put the project in place and maybe draw one or the other conclusion.

This project takes place in a succession of fiscal measures and matters that have the same objective: reduce the burden on the work and favor the development of the activity. We have prison since 1999, already with successive and slightly different majorities, with measures always in the same sense. This was the case in 2001 with the reduction of personal taxes. Today, in 2005, the 2001 corporate tax reform is fully implemented. This was also the case two years later with the reduction of the tariff by more than 6% for companies, the first phase for the corporate tax reform. This was an important measure. We have also taken a number of specific measures. For example, we introduced a reduced taxation for ships for the reinstallation of the merchant shipyard. This was also the case for the tax shelter for cinema and audiovisual activities, with good results in that regard and development of new activities. The same reasoning we followed for the researchers, with an exemption from payment of corporate fee.

That are a number of measures in the same direction, namely a publication of tax on labour in a publication of tax on labour for different companies, in the general of in different sectors with the aim of more activity in more jobs. This was also the case this afternoon during the discussion of the previous draft, with regard to the full implementation of the draft interprofessional agreement that had been negotiated and concluded. For more than 200 million euros out of the approximately 250 planned, we were again in the context of reductions of tax charges on work, for the workers themselves in terms of overtime, but also reductions of tax charges for companies, in the same overtime and in teamwork.

I therefore feel that a certain number of people in the majority, in this assembly, but also among the social partners, have well understood that this logic of successive reduction of the burden on work and on companies was going in the right direction.

Today we vote on an additional measure concerning venture capital that effectively helps all companies, from the smallest to the largest. This is also the answer to the criticism of the European Commission regarding the coordination centers. We take equal measures, the same for all companies.

There is no reason to exclude one or the other, it would pose a problem compared to the European regulation. I believe that this measure is expected because it promotes venture capital, that is, it promotes the formation of equity in companies. This may help to fight what many have talked about for a few years, this "credit crunch", this difficulty of accessing credit, especially for a number of SMEs in our country. I would like to clarify that, for SMEs, we do more than for other companies: that is why there is half a percent more interest calculated in this matter.

Finally, I would like to come back to two or three specific points.

by Mr. Massin has already addressed this point before me, responding to the questions of Mr. of Donna . We have already discussed them in the committee. I confirm that the unavailable account, which must comply with Article 205sexies provided for in the project, must be treated on the fiscal level as a taxed reserve. There is no reason to work differently.

I also agree that the concept of net tax value, as defined in the draft, must be determined, as already provided today, in the administrative commentary to the Income Tax Code. It is numbered 211/37 in its Annex 3.

Like the mr. According to Massin, it is evident that Article 205ter, §4, 3°, introduced by the draft in the CIR 92, does not contain any particular condition regarding the payment or non-payment of a normal rent. This means that the provision is applicable as soon as a business manager has the use of an immovable property. Things need to be clear on the subject, this allows us to move forward in the implementation of this project.

Mr Bogert gave a reply to Mr Nollet. I can hardly say more.

I think that a good project is, without other financial conditions, for the creation of more jobs. This is a debate between somewhat extreme opposition to the content of the project. The answer was very clear: it would be absurd to go further.

With regard to Mr. Mr. I would like to thank you for the coordination centers, as I did in the committee. Indeed, there is no better demonstration of the fact that the project helps to maintain these centres and their activities in Belgium. As announced by Mr. From now on, these centres will not pay more taxes in Belgium, in order for another country to attract them, it would be necessary for another country to pay them. I do not know whether a country in Europe or outside of Europe is considering remunerating companies that come to establish themselves in its territory. We found a completely satisfactory formula for all companies.

I would like to thank Mr. Massin has gone with us through the analysis of the figures that have been communicated. You can never be 100% sure. These figures have been analyzed by the Finance Administration, by the Financial Inspection, by the Budget. We tried to communicate as much as possible in the committee. Therefore, I believe that we should really stick to these numbers.

In conclusion, I feel – I remember the statements of previous prime ministers on this subject – that by hearing the different oppositions, the project must be fairly balanced. Indeed, I have heard very strong criticism from the left, or ⁇ from the extreme left, both from Ecolo and CDH. I have heard criticism from the right, or even strongly from the right side of the CD&V. I feel that the liberal socialist center has managed to find a balance. This is the result of many projects. When I hear the positions as they are stated, I feel that this project, for some, is catastrophic, because it will cost a fortune trying to help ⁇ while, for others, it doesn’t go far enough. As always, we try to find a balance.

In addition, this project is expected by the business world. I simply hope – we will be attentive to it – that it will allow to maintain, to develop the activity and of course also, through this, to develop employment. This is the primary objective of such a project. We had recently said that the government would focus on economic and social issues. This afternoon, with the successive projects discussed on the agenda, this is actually the case. Employment is clearly the priority of the government, of the majority. I would like to thank the latter for supporting us in this regard.