Latest tax & legal developments for Belgium

A great deal has happened since the first edition of The Real Estate Law Review appeared in 2012, but nothing more significant than the Covid-19 pandemic, a truly global crisis. This tenth edition of the Real Estate Law Review will continue to prove its worth by providing readers with an invaluable overview of how key markets across the globe operate and how they react to major world events. Covid-19 has served as stark reminder that it is no longer possible to look at domestic markets in isolation.

In addressing the severe economic impact of the COVID-19 pandemic, the European legislator amended the existing Prospectus Regulation and introduced the new EU Recovery Prospectus. In essence, the EU Recovery Prospectus entails a fast-track approval of a short-form prospectus that is available for secondary issuances of shares.

Following several convictions by the European Court of Justice, Belgium recently changed its legislation on the taxation of foreign real estate. The aim is to tax foreign real estate owned by Belgian residents in the same way as Belgian real estate, with the cadastral income (i.e. the deemed rental income) as taxable basis (“kadastraal inkomen” / “revenue cadastral”).

On 24 March 2021, the Belgian government introduced a registration tool for employers to indicate how many employees will work at the company premises, despite the work from home obligation imposed by the government, because they are not able to work from home. The registered data can be used in the event of a social inspection. The registration obligation was introduced by the Ministerial Decree of 26 March 2021.

In addition to the specific criminal liability that directors incur for certain acts that they themselves commit in this capacity, they are increasingly at risk of being prosecuted as participants in offences committed by or within the company. This risk is the blind spot of directors' criminal liability.

On 17 March, Flemish parliament adopted the announced decree on the reform of the Flemish Tax Code. The decree abolishes the tax benefit of so-called duo legacies and introduces a tax benefit for legacies to friends and distant relatives, as well as a 0% tax rate for gifts and legacies to charities.

On 22 March 2021, the Council of the EU amended the directive on administrative cooperation (through the so-called “DAC7”) to expand reporting obligations and exchange of information to cover sales through digital platforms. These rules would apply from 2023. In addition, DAC7 amends the actual exchange of information and cooperation between EU member states, focusing on joint actions and joint audits. These rules would apply from 2024.

Before Brexit, UK insurance undertakings and intermediaries took advantage from the EU passport mechanism to provide their (re)insurance services across the EU either on the freedom to provide services or by establishing local branches. By means of a Q&A we envisage the new regulatory framework for provision of insurance services by UK insurance undertakings and intermediaries in Belgium and the transitional regime for activities related to existing insurance contracts.

As of 1 January 2021, UK regulated entities are no longer allowed to make use of the European Union (EU) passport mechanism which allowed them to offer financial services across the EU on the basis of free provision of services or by establishing a local branch. In the Q&A below, we envisage the most significant impact of Brexit on the provision of financial services in Belgium or to Belgian residents by UK regulated entities.

The Real Estate Update provides you with relevant news, developments and insights in the Real Estate sector. In the March edition we focus amongst others on the new provisions on “heavy repairs” in the new Civil Code and we analyse for you the importance of the reduced VAT-rate on demolition – rebuilding activities for professional builders. Of course, you can always contact one of our team members if you would like more information on the topics covered.

Legal guide Chambers & Partners Europe has published its rankings for 2021. Loyens & Loeff continues its top ranking as leading business law firm.

Legal guide Chambers & Partners Europe has published its rankings for 2021. Loyens & Loeff continues its top ranking as leading business law firm.