Increase in the Surcharge in Case of Absence or Insufficient Tax Advance Payments as from Accounting Year 2024

For several years now, companies subject to (non-residents)/corporate income tax in Belgium have been accustomed to a tax increase percentage in case of absence or insufficiency of tax advance payments being around 6.75%. Starting from the accounting year beginning no earlier than January 1st, 2024, this percentage increases to 9%.

Tax Advance Payments

The system of tax advance payments enables companies subject to corporate income tax in Belgium to settle their corporate tax gradually throughout the accounting year and as they earn profits, even before submitting their tax return. This involves tax advance payment(s) of a portion of the tax due for the current fiscal year, based on the estimated taxable base.

Paying tax advance payments allows companies to avoid the payment of tax surcharges.

Tax Increase for Absence or Insufficiency of Tax Payments

Tax increase

Although the advance payment process is not mandatory, its non-compliance will now result in a tax surcharge of 9%, a significant increase compared to previous years. This surcharge is designed to encourage companies to meet tax deadlines and contribute to the Belgian tax system at an earlier stage.

Optimisation and neutralisation

By paying adequate and timely tax advance payment amounts, it is possible to reduce or even eliminate the 9% tax surcharge. Moreover, this elimination is particularly significant when the payments are made at the beginning of the accounting period:

The dates and percentages mentioned in the table above apply to companies whose accounting year-end is set on 31 December 2024. For companies with a ending date of the accounting year different from the calendar year, the rates are applicable as follows: Advance payment 1 until the 10th day of the month following the last month of the first quarter of the accounting year, Advance payment 2 until the 10th day of the month following the last month of the second quarter of the accounting year, Advance payment 3 until the 10th day of the month following the last month of the third quarter of the accounting year, and Advance payment 4 until the 20th day of the last month of the fourth quarter of the accounting year.

Solution

The increase in the surcharge percentage in case of absence or insufficiency of tax advance payments underscores the importance of proactive tax management. Companies are encouraged to review their tax strategies and make timely tax advance payments to avoid unnecessary financial penaltie

To achieve this, RSM Tax advises you to :

• Make tax advance payments as early as possible during the accounting year to benefit from the highest credits percentages ;
• Make tax advance payments of a sufficient amount based on the company’s profit forecasts and estimated taxable base.

Upon your request, your account manager is available to conduct simulations of the impact of this change for your company and its cash flow.

If you have any questions regarding this topic, don’t hesitate to contact our RSM Belgium | Tax team ([email protected]).