Budget 2024 mainly affects banking sector

With the European budgetary framework in mind, the “Vivaldi” government faces an additional EUR 1.2 billion of sanitation. Principally, it is mainly the banks that have to finance this. For instance, the taxes and levies that banks have to pay will become 100% non-deductible. There will also be an increase in bank taxes.

Fiscal measures

You can read below what measures the government intends to take on the fiscal front. 

• Some measures in the fight against tax avoidance and evasion:

  • There will be a tightening of the Cayman tax according to the Court of Audit's recommendations. For this, the government will use these recommendations as a guide to allow stricter and better inspections. Cayman tax refers to the transparent tax system when one owns assets in low-taxed capital structures, such as trust-like figures or companies in tax havens (‘legal constructions’).

  • Real estate investment funds are subject to tightened conditions to close the tax loophole in case these funds are held for a very short time only.

  • The anti-abuse provision for international tax avoidance is strengthened through deductible professional expenses and the tightening of the CFC (Controlled Foreign Company) measure to curb the artificial diversion of profits towards low-tax countries.

  • The tax deductibility of bank tax, the tax on credit institutions and the tax on investment funds will be abolished. In addition, the tax will be made progressive, so that banks with the most savings will also owe more bank tax.

  • Audits on the application of the legal entities tax and corporate income tax exception regimes are being tightened.

  • Audits within the football sector are being stepped up, in particular controls on financial transactions between football clubs and sports agents.

• VAT on demolition of a building and subsequent reconstruction of a private residence will be permanently pegged at 6%. From now on, the discount is valid across the entire country. However, it must be the only dwelling and the scope is limited to private individuals.

• The temporary reduced VAT measure on heat pumps will be extended.

• The complex investment deduction regime will be simplified with a particular focus on a substantially increased investment deduction for socially responsible sustainable investments.

• Tax deductions for professional diesel will be limited to the level of France.

• Excise duty on tobacco will be increased.

There will be no excess profits tax. Neither was the announced increase in the securities tax, packaging tax or flight tax held back.

Social measures

In addition to fiscal measures, the government will also provide for some social measures:

• The flexi-job system will be extended to education, childcare and school transport, among others.

• For the lowest earners, net minimum wages will go up from 1 April 2024 due to a reduction in social security contributions for both employees and employers.

• The activation contribution employers must pay when they put older workers paid at home will be increased. This is a disincentive for employers trying to get around the stricter conditions of the unemployment with company allowance (“SWT”) system.

More details are now awaited. Be sure to keep following us for further updates!