136 days after the federal elections of may 25th 2014, the new government Michel was formed. Political parties N-VA, CD&V, Open VLD and MR wrote a coalition agreement.
New taxes
There will be a ‘Cayman tax’, named after the Cayman islands. Those who have offshore accounts should notify the government and pay taxes on these accounts.
The newly formed government wishes to obtain new income from the existing fuel tax. If the retail prices drop, users won’t notice because the government will roam the benefits of the price drop. This system is called ’inversed cliquet’.
The Value Added Tax will be standardized. Services such as plastic surgery and internet shopping will be under submission of the VAT law.
One time skipping of the automatic indexation
The automatic indexation of the salaries, in which the wages are increased the same percentage as life gets more expensive, will continue to exist the upcoming years. This mechanism will however be skipped once. This will mainly benefit the companies, which do not need to pay additional salaries. The measure is not applied to the lowest wages and social security. As compensation the companies will receive an additional tax cut of 250 euro, by increasing the deductible costs for their employees.
Withholding tax
On top of that there is good news for enterprises: the withholding tax will be reduced from 33 procent to 25 procent. This should improve the overall competitiveness of Belgian enterprises.
Guaranteed salary is increased to two months
Those who are unable to work, due to illness, will receive the first two months of absence a salary paid by the employer. After this period, a compensation salary is paid by the health insurance of the employee. For employees, the current length of absence paid by the employer is 1 month. For blue collar workers, this currently is one week. In the new system, both employee and blue collar worker will benefit from the two months salary in case of illness, paid by the employer.
Retirement age
The statutory retirement age will be increased to 67 year. This is remarkable because it wasn’t mentioned in the pre-election proposals of the different political parties. The newly elected federal government chooses to do so, probably because it’s also happening in the neighbouring countries and because Europe is demanding it.
