How to prepare your business for the taxes

When you have a small business, the usual practice is to have an accounting service to take care of all relevant paperwork for you, because the intricacies (especially if you’re not that familiarized with it) can be tricky and confusing. But if you want to venture on your own – nothing wrong with that! Who doesn’t appreciate a risk-taker? Continue reading How to prepare your business for the taxes

Business taxation in brussels ?

Belgium is a founding member of the European Union, hosting a large part of its institutions. This, it plays an important role for the European and international politics. It is industrially developed and economically prosperous. Moreover, Belgium has a very developed business and services industry.  The country is divided into three parts: Flanders, Wallonia and Brussels – the capital. With almost one million inhabitants, Brussels is an economic and governmental center. It is a truly cosmopolite city and the administrative headquarters of the EU.

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VAT for businesses in Belgium

The common system regarding VAT (Value Added Tax) is applied to production and distribution of purchased and sold goods and services (within the European Union) in view of consumption.

In order to guarantee the tax neutrality, indifferent of the transactions number, nontaxable people can deduce the sum equivalent to the tax they have paid to other taxable persons from their VAT account. In the end, the VAT is supported by the final consumer, under the form of a percentage that is added to the final price of goods or services. After the exercitation of the deduction right, the taxable economic agents that have participated at the economic cycle, transfer the VAT sold to the state budget.

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Business administrative penalties in Belgium !

a) End to the 309% penalty. Belgium used to have a law against business owners who made private expenses look professional and eventually have their companies pay for it. These operations called “secret commissions” used to be penalized by increasing the contested amount by 309% and added it as a professional income. By doing so the administration would increase your taxable base, forcing your company to pay a higher taxation upon your profits.

Nowadays, the penalty became redundant. The administration will simply use it if they are unable to determine your private advantages as a benefit from your company. The company will not be able to deduct the expenses as “professional” and the business owner will be taxed as a personal income for the amount of benefits received.

Should I hire an accountant in Brussels ?

There are many factors you should consider when deciding whether to handle your finances on your own or with the help of an accountant in Brussels. With the variety of online resources and software packages available today, individuals and businesses may try to manage their money on their own at first. However, many soon change their minds about this approach after running into a complex financial situation that they are not prepared to deal with.

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Tax returns in Belgium ?

Tax returns can now be filled on-line! All you need is your Belgian ID card, a card reader and a pin code which you obtained when you signed up at your local city council.

Each year at the same time the brown envelope containing your tax returns lands in your mailbox. More Belgians choose to fill it electronically with Tax-on-web.  Last year, 3.4 million (and counting!) completed it online.  Here are of the main advantages of Tax-on-web:

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New Belgian VAT regulation in 2013 : read carefully !

No worries, VAT doesn’t increase !

However, the Belgian government has recently introduced a new red-tape which will complicate administrative tasks of profit companies wishing to deduct their VAT from their professional acquisitions.

VAT (Value Added Tax), is a European tax affecting consumers. When a consumer purchases goods on European soil that person is entitled to paying VAT (21% in Belgium). Businesses and freelancers operating on a B2B modality are usually exempt from paying it, as long as their purchased goods are intended for the sole purpose of their professional activities.

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Residents Taxation in Brussels made easy

Companies and people that are considered as Belgian residents must declare their entire revenues. As previously discussed, a Belgian resident is a person or an entity that has its centre of interest and/or manages its assets from Belgium.
There are four possible taxable revenues:

1. Professional revenues
2. Financial revenues due to dividends and interests exceeding 1,700 EUR/year
3. Real estate revenues
4. Other (anybody who speculates such as venture capitalists or financial investor).

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