The Leading Edge - Fall 2008 - (Page 13)

global disappear from the company and these “accrete” to the bare property. Thus you acquire premises in your own name but which were largely paid for by the company. If you privately sell a building that is your home, you will not incur any capital gains tax in Belgium on any profit made. You will not be taxed on a second home if you sell this after five years. If you sell this second home within a period of five years, you will pay capital gains tax at a rate of 16.5 percent, but you also will benefit from numerous deductions, which means that the 16.5 percent will usually work out even less. Also, in Belgium, there’s no such thing as annual wealth or capital taxes. Life insurance has to be privately built. It is also possible to accrue significant life insurance at the expense of a Belgian company with the director as the beneficiary. These premiums are tax-deductible for the company. And when the director is 60 or 65 years old (there are opportunities to withdraw earlier), he receives the full equity from his company and finally only pays 16.5 percent or in some cases even 10 percent in tax. 6 7 a straight line and between spouses, including cohabitants) or 7 percent (donations to other persons). These rates are final rates and no additional taxes have to be paid, even if the donor dies within three years. If the donation relates to the shares of a family company and provided that certain conditions are met—before and after the decease of the donor—the rates are further reduced. Holding companies can also qualify as a “family” company provided that the conditions, which among others relate to a minimum employment in the region concerned, are met. In the case of a death, the progressive rates for inheritance taxes apply, but not on the shares of a qualifying family company, which can benefit from low inheritance tax rates varying from 0 percent to 3 percent. health care is expensive and limited. When a Belgian resident is in need of health care, he has a wide range of possibilities. He has not only free choice of the physician he wishes to consult but also where he wants to be cared for, by a private physician or in a hospital. Does all this free choice result into long waiting lists when you need a procedure to be done? Not at all! Belgium has the shortest waiting lists of all its neighboring countries. In fact, people come to Belgium just to enjoy its health care. On top of all of this, health care comes at a reasonable rate in Belgium. Most costs are covered by social security so that only a small segment still needs to be paid by the patient himself. education has difficult access and high costs. Belgium has a well structured educational system, from preschool to university. Belgium also takes on the challenge of keeping its educational system accessible for students from all walks of life. In preschool and primary school, this results in a regulation of which expenses can be charged to the parents. Most of these expenses (books, materials, field trips, etc.) are funded by the Belgian government. In higher education this results in a fixed maximum enrollment to most of the basic trainings of EUR 540 ($747). Next to that the educational system awards a number of scholarships to make higher education more accessible for those less privileged. In this respect, a Belgian student also has (for the most part) free access to whatever training he wants to enjoy. Income is not guaranteed. Belgium guarantees an extensive safety net for white- and bluecollar workers who can no longer work. This results in a number of benefits that can be enjoyed under certain conditions and which in most cases are only limited by the legal retirement age. Benefits are provided in the areas of: • Unemployment; • Occupational illness; • Labor accidents; • Welfare; • Pre-retirement pension; • Disability. These systems guarantee a person who has a family to provide for, a minimum income of EUR 950 ($1,314). For further information, please contact Kristof De Boever, Vandelanotte Belgium, a Leading Edge Alliance firm, at Kristof.deboever@vdl.be or +32 56 43 80 60. 8 10 Inheritance taxes are high. In Belgium, inheritance tax differs depending on the region (Brussels, Walloon and Flanders). In Flanders, any inheritance tax for direct descendants is no less than 27 percent from EUR 250,000 ($346,000). In Walloon, inheritance tax for “third parties” can at a given point even amount to 95 percent. The three Belgian Regions (Flanders, Brussels and Walloon), which are each responsible for the gift and inheritance taxes in their region, have implemented interesting measures, especially for donations of movable property. In the Brussels and Flemish regions, movable property can be donated before a notary at a flat rate of 3 percent (donations in 9 ThE LEadIng EdgE 13

Table of Contents Feed for the Digital Edition of The Leading Edge - Fall 2008

The Leading Edge - Fall 2008 Contents Sculpt Your Business to Survive and Thrive Protect Intellectual Property Outside the United States Complaints about Meetings? The Leading Edge Alliance Top 10 Misconceptions of Doing Business in Belgium In a Nutshell: Q&A

The Leading Edge - Fall 2008

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