Chamber approves temporary partial withholding tax exemption

What does this exemption involve?

This is a temporary exemption applicable to withholding taxes owed for the months of June, July and August. The withholding tax that need not be paid in this event is calculated based on the total amount of withholding tax on paid or payable taxable remuneration for the month of May 2020. This specifically refers to all remuneration excepting holiday pay, annual bonuses and as yet unpaid remuneration.

The exemption is equal to 50 percent of the difference between the amount of withholding tax (per month) for June, July and August and the total amount of withholding tax for the month of May.

Example: Withholding taxes amount to EUR 20,000 in May and EUR 30,000 in June. In this case the applicable exemption for June is (30,000 – 20,000) / 2 = EUR 5,000.

What are the requirements to apply this exemption?

To be eligible for this temporary exemption, several conditions apply:

• You must have made use of the temporary unemployment scheme for at least 30 consecutive calendar days between 12 March and 31 May.
• The exemption is not applicable in the event that any dividend payments, capital reduction, purchase of own shares or other reduction or distribution of equity capital took place in the period from 12 March to 31 December.
• The exemption is not applicable if your business has a participating interest in or has made certain payments to companies that are located in tax havens.

The specific application modalities are not yet known and will be the subject of a Royal Decree.