The system of schedular taxes on incomes was introduced in Belgium after the war2 and has since constituted one of the chief sources of budget revenue. Out of an estimated total of more than 3 billions of francs for direct taxes, in the ways-and-means budget for 1933, schedular taxes account for approximately 1.7 billions, or 57 per cent. They amount to 19 per cent of the total fiscal revenue of the country in the same year (direct taxes, Customs and excise, registration).
The laws concerning schedular taxes on income establish the territorial character of the tax in respect both of incomes and persons. All income produced or received in Belgium is subject to schedular taxation, regardless of the domicile or nationality of the beneficiaries; on the other hand, persons domiciled or resident in Belgium are also taxed on income produced or received abroad. This twofold characteristic is expressed as follows in Article 2 of the co-ordinated laws2:
"Tax is levied upon:
"(1) The income from all real or personal property produced or received in Belgium, even if the beneficiary is not domiciled or resident in the country;
"(2) The income of persons domiciled or resident in Belgium, even if such income is produced or received abroad".
The notions of domicile and residence apply to individuals as well as to companies and partnerships.
An individual is domiciled in the place where his personal rights and interests have their centre — this is, as a rule, the place where his name is registered on the census or poll lists. It is also the place where he declares himself domiciled when executing a deed before a notary.
Residence, on the other hand, is the place where a person has the habit to live actually; it is a material situation which results from a stay of some duration. In most cases, domicile and residence are identical.
Companies and partnerships are domiciled in the place of their head office or principal establishment.3 The principal establishment is the establishment where the legal entity is centred, where the business is directed and controlled, the profits collected and meetings of shareholders held. In most cases this is also the head office and, when the statutes fix another head office, the latter is sometimes more apparent than real. In this case, the principal establishment is the place containing the chief factors of management or administration — i.e., the offices, especially the managing offices proper, the commercial services and the central accountancy.
Under Belgian law, the term "share company" (sociétés par actions) applies not only to companies by shares (sociétés anonymes) and limited partnerships with share capital (sociétés en commandite par actions) established within the precise meaning of the co-ordinated laws on commercial companies, but also to similar companies, such as private companies (sociétés àresponsabilité limitée), without distinction of nationality, provided, however, in all cases that they have their head office or principal establishment in Belgium and their capital divided into shares.
Accordingly, a share company, even if incorporated abroad, is subject to the regime governing similar Belgian companies, if it has its head office or principal establishment in Belgium.
Associations, other than share companies, which have legal entity, especially partnerships (sociétés en nom collectif and sociétés en commandite simple) are also taxable in Belgium if they have their head office or principal administrative establishment there; these associations are taxed as such on profits placed to reserve, but each partner is taxed separately on the sums allotted or distributed to him.
Foreign share companies and other foreign companies which have a branch, agency or any other establishment in Belgium are taxable in that country in respect of the profits resulting from any operations conducted by or through the said establishments.
There are three schedular taxes1:
(Articles 4 to 13, 33, 50 (paragraph 1), 51, 59 (paragraph 1, clause 2), 61, 65, 66 to 69, 72, 73, 74 (clause 2) of co-ordinated laws; Articles 1 and 2 of the Law of July 23rd, 1932.)
This tax, representing in 1933 about 28 per cent of the yield from schedular taxes, is imposed upon income from any land or buildings situated in Belgium; it therefore does not apply to property owned abroad by persons domiciled or resident in Belgium.2
Property is exempt from this tax if it fulfils the three following conditions: if it is national domain land: if it is at the same time essentially unproductive; if it is allocated to some public or public utility service.
Exemption is further granted to premises or parts of premises which an owner without any pursuit of gain may have devoted to the exercise of public worship, to education, or to the establishment of hospitals, hostels, clinics, dispensaries or similar charitable institutions.
This tax is not collected for the first ten years after a house is built, provided the owner can furnish proof that building began after December 31st, 1927, and that the house was occupied before January 1st, 1931.
This remission is subject to certain conditions regarding sanitation and habitableness; moreover, the cadastral income from these houses may not exceed certain maxima fixed according to the class of commune.1
The taxable or cadastral income (revenu cadastral) from land and buildings is determined by the competent authorities on the basis of an expert survey. It represents the ordinary average net income for one year — i.e., the gross income less the following deductions for upkeep, repairs, etc. —one-fifth in the case of buildings; one-tenth in the case of land.
The cadastral income is established by comparison with property of the same nature and similar yield situated in the same commune or in certain neighbouring communes selected as typical. The expert survey is made with due regard for the rent or for sale price and average rental value. If the taxpayer does not agree on the income ascribed to his property, the Administration and taxpayer may submit to arbitration of a third party, from whose decision there shall be no appeal, except on grounds of some material error.
Cadastral incomes are determined for a period of ten years.2
In each commune or cadastral section of commune, a yearly revision may, however, be made of the cadastral income of standard types of properties (immeubles-types) of each of the two categories (buildings and lands) or of one of the two categories only. If, for a category, the average of the revised income is greater or less, by at least 10 per cent, than the average of the income assessed for the current year, the cadastral income of all the parcels of the category may, by virtue of a Royal Decree, be reduced or increased by the same proportion as from the following year.
Revision is effected when an explanatory request is made before July 1st by the mayor or by a group of proprietors owning at least 10 per cent of the total number of the parcels of a category registered in the Cadastral Record. Revision may also be made by order of the Minister of Finance.3
The tax rate is fixed at 7 per cent.4 The provinces and communes may levy "additional centimes" on the tax thus computed.
Reductions of tax are allowed, on request, to heads of families numbering at least three children; this reduction amounts to 7 per cent for each child dependent upon the taxpayer on January 1st of the fiscal year, but it may not exceed 200 francs per child.
Further, seriously disabled ex-servicemen may obtain a reduction of one-fifth of the tax levied on the house or part of the house they are occupying.
Finally, a reduction of one-quarter is allowed, on request and under certain specified conditions, in respect of houses occupied solely by the owner.2
An exemption or reduction of this tax may also be granted in proportion to the difference between the cadastral income of buildings and the actual income derived from them during the fiscal year, provided this difference amounts to at least 10 per cent of the real annual income.
The tax is paid direct by the taxpayers concerned within two months3 of receiving the assessment notice. On request of the assessee, the tax may be charged to the tenants of the taxable property, on payment of a two francs fee for each extra notice sent out. In default of payment within the prescribed time-limit, the Treasury is entitled to interest on the sum due at 6 per cent per annum.
(Articles 14 to 24, 34, 50 (paragraphs 2 and 3), 51 to 59, 61 (paragraphs 3 and 5), 62 to 80 of co-ordinated laws.)
The tax on income from movable capital makes up the second schedule. In 1933, it yielded almost 37 per cent of the yield from schedular taxation.
This tax is an impersonal tax payable irrespective of the status, nationality and social or family circumstances of the individual, partnership or company that pays or receives income in Belgium. It is imposed upon all income from personal property — except such as is expressly exempted by special provisions enacted in the public interest — whenever that income actually materialises. Nevertheless, although the tax is applied without discrimination to all personal income and even to income from real property received abroad, its rate differs substantially according to the kind and origin of the income.
This tax is levied upon dividends, interest, annuities, and upon all other products of invested capital of whatever kind. These are divided into four main categories.
The tax is in the first place on income from shares of all kinds (actions or parts), bonds or other loans payable by commercial or non-commercial share companies having their head office or principal administrative establishment in Belgium.
Income from shares of all kinds includes dividends, interest, partners' shares, founder shares and all other profits distributed in any form and for any consideration whatsoever, also total or partial repayments of a company's capital as the result of profits.
If the company is wound up in consequence of liquidation or for some other reason, the tax is based on the total amount distributed in cash, bonds or otherwise, after deducting fully paid-up capital remaining to be refunded.
This capital is, if necessary, multiplied by a co-efficient fixed by Royal Decree,1 account being taken of the average rate of exchange in the year of payment.
When a company is dissolved without any distribution, the tax is payable on the real value of the company's property, subject to deduction as above.
This tax, however, will not be collected from share companies which are liquidated by way of merger before July 1st, 1935.2
The second category of income assessable to personal property tax includes income from bonds issued by the State, provinces and communes and other public institutions or bodies, except as exempted by special legal provisions.3
The third category of income liable to personal property tax is made up as follows:
(1) Capital invested in any commercial, industrial or agricultural, concern, operated otherwise than by the companies in the first category, and excluding capital invested either by an owner in his own business or by managing partners in partnerships having legal entity.
The collection of personal property tax is therefore limited to the income from capital invested in any commercial, industrial or agricultural enterprise by non-active partners, especially sleeping partners, who only contribute funds, securities or property, even though they may intervene from time to time as legal or technical advisers, etc., to the association.
(2) All loans and debts to the charge of individuals and companies other than share companies, resident or domiciled in Belgium.
The income from debts and loans includes income:
(3) Sums of money deposited in Belgium with banks, exchange, credit, deposit or savings institutions, or with bankers, notaries, business agents or other depositaries.
The tax is payable on the income from these deposits whoever the depositaries may be, and irrespective of the domicile or residence of the depositor and of the duration and nature of the deposit (guarantee, surety, or consignment).
Nevertheless, debts or deposits of a professional character are exempt, if it is duly shown that the interest thereon is included in the accounts of the beneficiary enterprises situated in Belgium (Article 18, last clause of co-ordinated laws).
The fourth category includes income from foreign debentures and securities, foreign debts, cashed or received in Belgium by any person whatever or cashed or received abroad by individuals or legal entities domiciled or resident in Belgium.
Under certain conditions fixed by the Minister of Finance, the tax is not payable on income from foreign securities deposited in Belgium by individuals or legal entities having in Belgium no domicile, residence or establishment.
The tax also applies to the yield from the lease, use and concession of any personal property and to income from real property situated abroad.
The Law of June 21st, 1927, created a special regime in favour of enterprises operating in the Belgian Congo.
In principle, enterprises — whether they have or not the form of companies — which have their head office or principal administrative establishment in Belgium and their centres of operation in the colony, are liable to taxes on income, regardless of whether the taxable income is of Belgian or colonial origin.
The tax is imposed: (a) in the case of share companies, on the income from share and on profits placed to reserve or on one-twentieth of the annual net profit in the case of Congo private companies (sociétés àresponsabilité limitée); (b) in the case of other taxable enterprises, on income distributed to members or partners or on other income from invested capital.
The rate of the tax is 17 per cent for the incomes enumerated above; it is reduced to 13 per cent on income from bonds.
The Colonial Treasury receives the whole of the tax on the interest on colonial loans and on dividends accruing to the Government of the Belgian Congo from securities in its portfolio, and four-fifths of the capital yield of the other taxes on securities, including the tax on income from bonds; the remaining fifth goes to the Belgian State.
This tax, being an impersonal tax, is levied on all income without regard to the person who pays or receives it (see page 52); consequently no deduction is allowed, either from the taxable basis or from the amount of tax, by reason of family charges or other considerations based on the status, nationality or social circumstances of the person who pays or receives such income.
If income is fixed in a foreign currency or is payable abroad, the amount is converted into francs at the rate of exchange at the time of payment, prior to assessment (Article 19).
Further, any tax paid by the debtor in discharge of the beneficiary of the income is added to the latter, for purposes of tax assessment (Article 14, paragraph 2).
The rate of the tax varies between 2 and 22 per cent, according to the table of tariffs (see Annex).1
As a rule, tax is collected by deduction at the source at the time when the income is paid. It is paid into the Treasury within a fortnight of the attribution or payment of the income; in default of payment within this time-limit, the Treasury is entitled to charge interest on the sum due at the rate of 6 per cent per annum.
The provinces and communes may only levy additional tax (centimes additionnels) on income from capital invested in Belgium.
(Articles 25 to 32, 35, 50 (paragraphs 4 and 5), 51 to 59, 61 (paragraphs 3 and 5), 62 to 80 of co-ordinated laws; Article 5 of the Law of July 23rd, 1932;1 Articles 7 and 8 of the Royal Decree of January 13th, 1933.2)
note note
The tax on professional income, or professional tax, forms the third schedule. Although, in 1933, its yield was equal to that of the tax on income from personal property (37 per cent of all schedular tax yield), it is of more importance for the purposes of the present study.
The professional tax is partly impersonal and partly personal, for, while it is imposed upon income whenever earned, deductions both from the taxable basis and the amount of tax depend upon the status of the beneficiary.
Professional tax is payable by all individuals or legal entities, associations without legal entity and de facto associations:
The professional tax on the different payments under (b) is collected at the source and therefore raises no difficulty. The treatment of the taxpayers referred to under (a), however, calls for certain explanations.
It was said at the beginning of this chapter that, in Belgium, the fiscal regime applying to the Belgian taxpayer domiciled or resident in Belgium is applied ipso facto to a foreigner engaged in business in Belgium, whether an individual or a company other than a share company. Foreign share companies operating in Belgium are expressly taxable at the fixed rate of 10 per cent (plus provincial and communal additions) on all profits earned by their Belgian establishments.
The regime applicable to Belgian share companies and foreign share companies differs therefore as follows. Belgian companies owe the tax on income from personal property on distributed income, and professional tax on a graduated scale (maximum of 9.9 per cent, plus provincial and communal additions) on other profits, while foreign companies are only liable to professional tax at the fixed rate of 10 per cent3 (plus provincial and communal additions) on all profits from Belgian sources.
The Law of June 21st, 1927, as was seen (page 54), created a special system in favour of enterprises operating in the Belgian Congo. That law lumps together profits earned in Belgium and the Congo and subjects them to a combined tax, the yield from which is divided between the colony and the home country.
After the collection of the tax on income from personal property on income liable thereto, the professional tax is levied at the ordinary rates on remaining profits, except on reserves invested in the colony within the previous five years.
When colonial enterprises have operating centres abroad or work up Congo products in Belgium, the profits earned by these centres or establishments are subject to the ordinary rules of taxation. One-fifth of the State's share in the taxes on profits of the said establishments earned in Belgium accrues to the Colonial Treasury.
When a taxpayer has his head office or principal establishment in Belgium and establishments abroad, he is taxed on all profits realised both in Belgium and abroad.1 Nevertheless, the results of the Belgian and foreign operations must be considered separately, although with due regard for the results of the general balance-sheet. For this purpose, the taxpayer concerned must attach to his annual declaration, not only the general accounts, but a copy of the separate balance-sheet and profit-and-loss account relating to the business of the separate foreign establishment (Article 54, paragraph 1, (3)). These last profits are taxed in Belgium at a reduced rate, if they have already been taxed abroad (Article 35, paragraph 7).
It does not matter whether or not the foreign establishments are de facto dependent upon the centre of management in Belgium.
In the case of an individual, the whole of the profit is liable to professional tax, subject to a reduction of rate for income earned and taxed abroad.
On the other hand, in the case of a company or partnership, professional tax on total profits is subject to the deduction of distributed income or of income liable to personal property tax as income from invested capital; both taxes, moreover, are levied at reduced rates on profits earned and taxed abroad.
In principle, foreign enterprises are only taxable in Belgium if they have one or more establishments in the country, at whose head office they are bound to keep separate accounts of the business transacted by or through these establishments. The only deductions allowed under the head of general or administrative expenses are expenses of this kind incurred by the said Belgian establishments (Article 27, paragraph 4).2
The word establishment must be understood in its broadest sense: a place of business, an agency and a branch constitute establishments within the meaning of the law. The existence of a board of management and staff is not essential. This definition covers industrial and commercial establishments and insurance companies, which are, by common knowledge, publicly represented in Belgium by authorised agents.
A foreign enterprise operating in Belgium through an establishment is liable to professional tax at the rate, and according to the rules, applying to Belgian taxpayers of the same class. Only the profits of the Belgian establishment of a foreign share company pay the uniform rate of 10 per cent.3
A special regime applies to representatives of foreign firms, foreign bargemen, itinerant vendors, etc.
Subject to any exceptions provided for in international conventions, the professional tax is fixed at a minimum of 200 francs in respect of representatives of foreign firms, foreign bargemen, itinerant vendors, hawkers and other persons who carry on their business in Belgium, without having any domicile, residence or establishment in the country. The tax is paid before engaging in the business in Belgium. If, however, the resultant income justifies a higher tax, a proportionate supplement may be demanded (Article 27, paragraph 4).
In principle, foreign shipping companies whose vessels land in Belgium are liable to income-tax. The Government, however, is empowered1 to conclude international conventions granting on a basis of reciprocity full exemption from income-tax to foreign shipping enterprises not domiciled in Belgium.
Conventions of the kind have been concluded with Norway, Denmark and Iceland, Finland, Ecuador, Sweden and France.
Negotiations are proceeding with other countries.
The following is deemed to be taxable income:
(a) Profits of any Industrial, Commercial or Agricultural Enterprise, including Profits from the Individual Work of Members of Commercial or Non-commercial Companies having Legal Entity. — The profits of industrial, commercial or agricultural enterprises are those resulting from any operations conducted by or through their establishments.
For purposes of professional tax, the law expressly considers as profits:
Nevertheless, tax is only imposed upon the half of profits actually employed, within the country and within twelve months of the close of the trading year, on the building of workmen's houses or installations on behalf of the staff of the enterprise.
Taxable income further includes personal expenditure, such as the rent of premises used for living purposes, the upkeep of the taxpayer's household, cost of education and any other expenses not necessitated by the exercise of the profession or occupation.
The income enumerated above is taxable on its net amount — that is, on the gross amount less only such professional expenses as have been incurred, during the fiscal period, for the purpose of acquiring and maintaining that income.
The following, inter alia, are regarded as professional charges:
Depreciation allowances are based upon investment value or cost price.
Nevertheless, as regards business premises and industrial, commercial or agricultural plant acquired or constituted before July 1st, 1926, depreciation allowances may be based upon a cost price re-assessed under conditions and within limits to be fixed by Royal Decree; this re-assessment must be entered in the closed accounts or balance-sheets of 1931 at the latest.1
(b) Miscellaneous Remunerations. — The co-ordinated laws of Belgium concerning income-taxes also subject the following miscellaneous remunerations to professional tax:
Advantages in kind are added to remunerations or wages; they are computed at their actual value or are re-assessed at a flat-rate, according to circumstances.
From these remunerations it is permissible to deduct sums withheld as contributions to pensions or insurance funds, and professional expenses. In the absence of evidence — and generally there is none — these charges are fixed at one-quarter if the emoluments are less than 15,000 francs and at one-fifth if they exceed that amount (with a minimum of 3,500 francs). This fixed sum, which includes the taxes deductible as professional expense, may not exceed the amount of such taxes by more than 30,000 francs.
Taxable emoluments do not include:
(c) Profits from the Liberal Professions, etc. — Lastly, the Belgian fiscal regulations subject to professional tax the profits of any kind whatever from the liberal professions, functions and offices and any lucrative employment.
These profits consist of the difference between total receipts and expenses attaching to the exercise of the calling.
Failing proof to the contrary, these expenses are fixed at one-fifth of the said receipts, but this amount may not exceed by more than 30,000 francs the taxes deductible as professional expenses.
Persons engaged in the liberal professions or fulfilling functions or offices are required, under penalty of a fine of 500 francs for each infringement, to furnish a signed and dated receipt of their fees, commissions or other emoluments.
This receipt is taken from a book with counterfoils, the model for which is prescribed by the Minister of Finance. The latter may demand that entry be made in the counterfoils and leaves of this book only of the total amount of fees, commissions or emoluments and the name of the person from whom they were due.
Any person making a payment of this kind without demanding the receipt is liable to the fine jointly with the person concerned.
The issue of a receipt is not compulsory for professional persons if they keep a classified daily record of their professional receipts and expenses. Any omission to do this makes them liable to the fine mentioned above.
The Belgian fiscal system is based upon the principle of an annual declaration of income.
Generally speaking, all those liable to the three classes of professional tax have to submit, during the first three months of the year, the return required under Article 53 of the law to the Tax Controller within whose jurisdiction they have their principal establishment or are domiciled or resident.
But taxpayers whose accounts do not cover the calendar year, and also all share companies, have to forward to the Controller of Taxes, within a fortnight of the approval of the balance-sheet and profit-and-loss account and, at the latest, within six months of the close of the trading year, a return containing, according to categories, the total income liable to the tax on income from personal property and professional tax. This return must be accompanied by a copy of the balance-sheet and profit-and-loss account, of the resolutions approving them and the Minutes or reports $$$relaing thereto; further, by a list showing the number and amount of shares and bonds issued and of securities of one kind or another bought or sold during the past financial period, and by a copy of the separate balance-sheets and profit-and-loss accounts of any separate foreign or colonial establishments.
Failing documentary evidence furnished either by the taxpayer or by the Administration, taxable profits are determined for each taxpayer by comparison with the normal profits of persons similarly placed and with due regard, according to the circumstances, for capital invested, turnover, number of workmen, motor-power used, rental value of exploited land and any other useful information. The Administration may, for this purpose, agree upon empirical bases of taxation with the professional associations concerned.
No division of profits from joint operations is allowed between members of the same family living together or between the members of any company, association or community. However, the emoluments of members of the family of an entrepreneur working with him are included among general costs, provided they do not exceed a normal wage or salary and provided they have been assessed as such to professional tax (Article 27, paragraph 3).
The tax is payable by the head of the family or by the director of the company, association or community.
Professional tax, in the case of share companies, is levied upon their profits less income distributed or liable to personal property tax as income from invested capital (Article 35, paragraph 2).
In order that the same income may not be taxed twice, Article 52 of the co-ordinated laws provides for the deduction from schedular taxes of all direct or additional taxes which the taxpayer may already have paid in Belgium on taxed income, or which share companies with their head office or principal establishment in Belgium may have already paid there on sums distributed as shares.
As regards companies other than share companies, including partnerships, having a legal entity, each member is liable separately, in respect of sums allotted or distributed to him, to professional tax if he is an active partner, or to personal property tax in other cases.
The company or partnership is liable to professional tax in respect of profits placed to reserve, the provisions of Article 52 being applicable to this case also.
The professional tax is on income, actually determined or presumed, either for the previous year, in the case of taxpayers whose accounts coincide with the calendar year, or, in the case of other taxpayers, for the twelve months covered by the accounts of the current year.
The income for the year or taxable period, as the case may be, is subject to deduction of any professional losses incurred during the two preceding years or financial periods. Thus a taxpayer, whether an individual, a partnership or a company, who keeps regular accounts and suffers professional losses during the past two years or financial periods may deduct these losses from the profits of the year following.
In determining profits earned abroad, the only deductions are the overhead expenses of the establishment and the taxes paid in the country where it is situated.
The general or administrative expenses of the head office in Belgium, even when incurred on behalf of a foreign establishment, must be placed to the account of Belgian operations. This applies to directors' and auditors' fees and to bond coupons; however, the amount of the coupons must be accounted to the foreign establishments if the bonds are issued abroad and for the requirements of the foreign establishments.
Profits derived from operations directed by the taxpayer from the head office in Belgium without the intervention of agents or establishments abroad are not regarded as having been earned abroad. Thus, profits from reinsurances contracted by a Belgian firm with a foreign insurance business are regarded as Belgian profits; so are the profits from speculations figuring in the head office's portfolio and consisting in the repurchase of bonds below par.
In principle, foreign enterprises which derive income from operations in Belgium are taxed on the results of their specifically Belgian operations as shown by the separate accounts they have to keep, even when the general balance-sheet reveals a loss. If the accounts fail to supply the necessary evidence,1 the enterprise is taxed on a minimum profit fixed by the Royal Decree of October 8th, 1930.2
It is therefore necessary to separate from the results of the balance-sheet, the profits (dividends, increases of capital, reserves, writings-off of foreign losses, etc.) realised by the Belgian establishment, which constitute the taxable basis.
If specific capital is set aside for the establishment in Belgium and the latter has a special account and a separate balance-sheet in the enterprise's accounts, that special account and separate balance-sheet, duly checked, form the basis for determining the taxable profits.
Profits expressed in foreign currency are converted, if necessary, into Belgian money at the official rate of exchange at the date on which the accounts in question were closed.
Foreign Insurance Companies. — Foreign insurance companies operating in Belgium are not required to apportion their profits according to the class of policy (life insurance, temporary, mixed, etc.), but only according to the branch of insurance (life, fire, etc.).
These companies must include in their accounts:
The accounts of foreign insurance companies must also mention any reinsurance business relating to policies concluded by the Belgian agencies or contracted in Belgium by agents domiciled abroad, if those agencies intervene in any way in the surrender of premiums to reinsurance companies, the payment of that part of losses refunded by the latter, the collection of reinsurance commissions, etc.
In order to ensure the requisite uniformity in the taxation of foreign insurance companies, the Administration has ordered the use of a standard profit-and-loss account containing all the information required.
Foreign Firms selling Imported Goods in Belgium, or re-exporting them abroad. — The profits from these operations are determined in Belgian francs, after deducting from the price of sale or re-consignment:
Professional tax is levied on the total annual income of each taxpayer or, for periods of less or more than one year, on any proportionately equivalent sum.
It is not due when the taxable income is below the following minima:
4,800 francs in communes with fewer than 5,000 inhabitants;
5,600 francs in communes with from 5,000 to 30,000 inhabitants;
7,200 francs in communes with 30,000 or more inhabitants.
The commune taken into consideration is either that in which the calling is exercised or that in which the taxpayer is domiciled or resident, whichever he prefers.
The above minima are increased to take account of a taxpayer's dependents.1
In the case of taxpayers whose professional income does not amount to 50,000 francs, the tax varies from 12 francs to 2,256 francs, according to the size of the income and on a sliding scale fixed by Royal Decree according to the class of commune.2
In the case of taxpayers with a professional income of 50,000 francs or more, the tax is computed on the following scale1:
Net income of: Percentage of tax
50,000 and less than 60,000 5.
60,000 and less than 70,000 5.5
70,000 and less than 90,000 6
90,000 and less than 110,000 6.5
110,000 and less than 130,000 7
130,000 and less than 150,000 7.5
200,000 and over 9
On the tax thus computed, reductions are granted in respect of family charges.2
In the case of industrial, commercial and agricultural profits exceeding 50,000 francs net, the professional tax is increased by one-tenth, with a minimum increase of 18 francs.
When these profits are between two-thirds of the exempted minimum and the minimum mentioned above, tax is collected at a flat rate between 10 and 25 francs on a scale fixed by Royal Decree.3
By way of exceptions to the above rates, the tax is uniformly fixed at:
Nevertheless, as regards directors, etc., who actually exercise, by election or appointment, real and permanent functions in the same company, the ordinary regime of the law remains applicable to all fixed or determinable remuneration paid to them by the said company, in so far as this remuneration exceeds the fees paid to their colleagues not vested with special functions. The part so subject to the ordinary regime of the law may not exceed for each taxpayer and company either 100 per cent of the net profit on which the statutory percentages have been computed or 100,000 francs if the application of the said percentages gives an amount less than 100,000 francs.
If all the directors, as well as those officers who can be assimilated to directors, exercise special functions in the same company, that part of the remuneration susceptible to the regime of ordinary law may not exceed for each taxpayer and company either 0.75 per cent of the above-mentioned net profit, or 75,000 francs if the application of the said percentages gives an amount less than 75,000 francs.
The remuneration is reckoned at its gross amount — i.e., without deduction of the amount allowable as actual or estimated professional expenses.
The possible exception of the 100 "additional centimes" may not be granted in connection with more than two companies to be designated by the interested parties in their annual returns.
The withholding of the tax, and the "additional centimes" connected therewith, at the source is regulated by Royal Decree.5
The tax, computed according to the ordinary scales, is reduced to one-fourth for that part of the taxable income which is earned and taxed abroad.
The provinces and communes are allowed to levy "additional centimes" tax on the professional tax on industrial, commercial, agricultural and similar profits and on profits from the liberal professions, functions or offices realised in Belgium; these "additional centimes" may not be added to the tax on profits earned and taxed abroad or in the Belgian Congo.
The communes only may levy a special tax on wages, salaries and pensions.
No provincial or communal tax may be levied upon the fees of directors, auditors, liquidators, etc., of share companies already liable to the 100 "additional centimes" imposed in favour of the State.1
Professional tax on industrial, commercial and agricultural profits and on profits from the liberal professions, functions and offices is payable within two months2 of receiving the assessment notice or demand note. The Treasury is entitled to charge interest on sums due at 6 per cent per annum.
Taxpayers may appeal against their assessments to the provincial or district Director of Taxes.2
The Controller assesses tax on the declared income unless he deems it an incorrect figure. In this case, he may correct it on informing the taxpayer, before assessment, of the figure he proposes to substitute for the figure declared and giving the reasons for the alteration. The taxpayer is given twenty days in which to submit observations. If the parties still disagree, the dispute may be submitted to a Committee which sits in the chief town of each control area, and whose composition and functions are determined by Royal Decree.3
The Committee's opinion, with reasons for it, is notified to the taxpayer by the Controller, who also informs him of the income figure upon which he proposes to assess tax.
If this figure coincides with the opinion of the Committee, the taxpayer can only obtain a reduction by furnishing proof of the exact amount of his taxable income.
In the contrary event, the burden of proof is upon the Administration, if the income taxed is in excess of the Committee's estimate.
The Committee must also be consulted before any ex-officio assessment is made.
Professional tax on the various remunerations is collected by withholding the amount due at the time of payment; the law prescribes that the persons responsible for paying the income may deduct therefrom the tax due, subject to no appeal by the beneficiaries, whatever their nationality. This deduction is effected on a scale fixed by Royal Decree;4 the tax thus withheld must be paid to the receivers of taxes within a fortnight of the end of the month in which the income was paid. The control of payments and any adjustment of the fiscal position of the taxpayers concerned are effected by means of individual forms filled up by the employer. These forms are issued to the person in receipt of the salary, wage, etc., and attached by him to his annual declaration.
In the case of persons who receive professional income of different kinds, tax is computed on the total income for the previous year after deduction of any taxes collected at the time the income was paid.
(Article 37 and following of co-ordinated laws; Articles 6 and 7 of the Law of July 23rd, 1932; Articles 1 to 6 of Royal Decree of January 13th, 1933, in execution of Article 1 of the Law of December 30th, 1932.)
Until 1930, the income-tax system included, in addition to the schedular or impersonal taxes, a personal tax called complementary income-tax or super-tax, payable by the taxpayer in respect of his total income — i.e., the total income directly or indirectly subject to schedular taxes and income exempt from these taxes.
The Law of July 13th, 1930,1 modified by Articles 6 and 7 of the Law of July 23rd, 1932, and by Articles 1 to 6 of the Royal Decree of January 13th, 1933, issued in execution of the Law of December 30th, 1932, replaced the super-tax on total actual income by the complementary personal tax, based in principle on a number of expenditure indices common to the majority of taxpayers and indicating the apparent station in life — rental value of house and furniture, number of servants, horses, motor-cars. Nevertheless, when the total amount received by the taxpayer as income from real property, capital investments, mortgage debts and the exercise of a profession exceeds 100,000 francs, the tax is assessed on the total of the income from these sources, provided such total exceeds the basic amount of taxation as determined by the application of the indices.
Any individual domiciled or resident in Belgium during the first three months of the year is liable to complementary personal tax if the taxable basis exceeds a legal minimum, varying according to communes and due regard being paid to family circumstances. The tax is payable by anyone who, as owner or tenant, occupies houses or reserves houses for partial or total occupation by his family or servants (seaside villa, country house, shooting-box, etc.).
The tax is not payable by companies, partnerships or legal entities.
The complementary personal tax is assessed on the following bases:
Houses. — By houses are meant premises or parts thereof for the private use of taxpayers, including commons, parks or gardens belonging to them, but not including buildings used exclusively for the exercise of some profession, trade or industry. The tax is payable by any person who occupies houses or reserves them for occupation, even partially or temporarily, by his family or servants.
The rental value of these houses is the gross income on which the cadastral income is based, or the actual or presumed income when occupation is limited to part of a house not included separately in the cadastral survey.
Furniture. — The rental value of furniture is fixed at 5 per cent of its capital value as determined by the Law of August 28th, 1921,2 establishing a tax on furniture.
When houses are let furnished, account must be taken of rental value both of the house and of the furniture.
Domestic Servants. — The expenditure index representing the services of domestics and other persons is fixed at:
Horses. — The index figure in respect of horses used for riding and driving4 is fixed at 12,000 francs per horse.
Carriages, Motor-cars, Canoes and Steamboats, Motor-boats and Sailing Vessels, Aircraft. — The expenditure index applying to these means of transport varies from 2,000 to 50,000 francs, according to rules to be fixed by Royal Decree.5
Division of Indices. — Since the object of the complementary personal tax is that each taxpayer shall pay according to his standard of living, measures have had to be taken to prevent persons dividing their indices with one another and thus unduly benefiting by a reduction of or even exemption from tax. The law therefore lays down that persons living together so as to form one household may not divide their indices. The tax is assessed on all the taxable elements and is payable by the head of the family or the person who occupies the position of head of the household.
Division, however, is allowed between persons who constitute associations having civil personality and not formed for purposes of gain.
Expenditure indices are computed, having regard to the normal situation of the taxpayer on January 1st of the fiscal year.
In the case of persons who become liable to the tax after this date, account is taken of the indices existing on March 31st of the fiscal year.
The indices once fixed, the taxable basis for complementary personal tax is determined by applying the following coefficients to the total expenditure indices:
2 if the total is less than 25,000 francs;
2.2 if the total is from 25,000 to 50,000 francs;
2.6 if the total is from 75,000 to 100,000 francs;
2.8 if the total is from 100,000 to 125,000 francs;
3 if the total is 125,000 francs or more.
Nevertheless, when the total amount received by the taxpayer as income from real property, capital investments,1 mortgage debts and professional activities exceeds 100,000 francs, the tax is assessed on the total of the income from these sources, provided such total exceeds the basic amount of taxation as determined by the application of the indices.
For the purposes of carrying out this provision, the income from real property situated in Belgium must correspond to the cadastral income attributed, for the period to which the complementary personal tax refers, to the property which the taxpayer holds on January 1st of the year to which the assessment relates; as regards income from other sources, the term "income" means that which has been realised during the previous year.
Exempted Minimum.2 — The tax is not due when the taxable basis thus obtained does not exceed:
15,000 francs in communes with fewer than 5,000 inhabitants;
20,000 francs in communes from 5,000 to 30,000 inhabitants;
25,000 francs in communes with 30,000 inhabitants or more.
In families with three or more children, this minimum is raised per child dependent upon the taxpayer on January 1st of the fiscal year as follows:
2,400 francs in communes from 5,000 to 30,000 inhabitants;
3,000 francs in communes with 30,000 inhabitants or more.
Further, the number of out-door workers (ouvriers-domestiques) or maids is reduced by one or by two units according as there are, on January 1st of the fiscal year, at least three or at least seven children dependent upon the taxpayer.
As regards seriously disabled ex-servicemen entitled to benefit by the Law of May 13th, 1929, the minima and increases fixed above are further raised up to the amount of the invalidity pension of the person concerned.
If the minima given above are exceeded, tax is computed on the whole taxable basis.
If the basis does not amount to 25,000 francs, the tax is 1 per cent; above 25,000 francs, the rate gradually increases for every 25,000 francs or fraction of such amount by 1/2 per cent up to 125,000 francs, by 1 per cent from 125,000 up to 200,000 francs and by 2 per cent from 200,000 francs up to a maximum of 20 per cent for the part of the taxable basis in excess of 350,000 francs.1
The complementary tax payable by the head of a family including three children is reduced by 7 per cent for each of these children dependent upon the taxpayer on January 1st of the fiscal year.2
The provinces and communes are not allowed to levy "additional centimes" tax on the complementary personal tax or any similar taxes on the basis or amount of that tax.
The tax is collected on the basis of an annual declaration by the taxpayer and is payable according to the tax list within two months3 of receipt of the assessment notice.
As with schedular taxes on income, persons liable to complementary personal tax may appeal against their assessment to the Director of Taxes (see note 1 on page 51).
If an individual not domiciled or resident in Belgium, or a foreign company whose principal establishment is not situated in Belgium, controls or possesses in the country one or more establishments, such establishments are, for purposes of applying the co-ordinated laws on income taxes, deemed to be foreign enterprises.
In principle, a foreign enterprise is liable to schedular taxes only if it has in Belgium one or more establishments dependent upon it. The tax is levied on the total profits from all operations conducted by or through these establishments (Article 27, paragraph 4), the tax on income from land and buildings being imposed only on income from real property situated in Belgium.
I. (a) If income is earned by a foreign enterprise operating in Belgium, but belonging to an individual, the whole of the profits realised in the country from all operations conducted by or through the Belgian establishments is liable to tax, which is collected from the owner of the enterprise.
(b) and (c) The same applies when income is earned by a foreign enterprise belonging to a legal entity (partnership or company). Only the profits earned by or through Belgian establishments are subject to tax, which is collected from the company or partnership.
On the other hand, if the foreign firm is represented in Belgium by a partnership or company in such a way that the latter in law and in fact directs or conducts operations only on behalf of the said firm, the latter is regarded as having an establishment in the country.1
If, however, the partnership or company deals in its own name with Belgian customers, selling to or buying from them goods or articles produced by or delivered to the foreign firm, the Belgian company or partnership is regarded as an independent organisation and the Belgian revenue authorities disregard any activities of the foreign firm.
This provision does not, of course, cover cases of fraud or collusion.
II. It follows from the above principles that, if income is earned by a foreign company or partnership having no establishment in Belgium, the company or partnership is not taxable in Belgium on income earned there.
If the enterprise has establishments in Belgium, if does not matter whether income is earned there or not; the foreign enterprise is in any case liable in respect of the total profit resulting from all operations conducted by or through those establishments,2 whatever results the general balance-sheet may show.
By virtue of its impersonal character, the tax on income from personal property is imposed on dividends at the source, as and when they are received in Belgium and irrespective of the status or nationality of the person presenting the coupons and whether the latter are of Belgian or foreign origin.
Thus in the case of dividends paid by Belgian share companies, tax at 22 per cent1 is deducted at the source by the body which owes the income, and the beneficiary, whether Belgian or foreign, an individual or a legal entity, and whether domiciled in the country or not, receives the income net.
As regards dividends paid by foreign share companies, whether their head office is in Belgium or not, tax at the reduced rate is withheld at the source by the body paying these dividends in Belgium, unless it is shown that the tax has already been deducted in Belgium by a previous intermediary (Article 23 of co-ordinated laws).
If this dividend is received directly abroad by an individual, company or partnership with a fiscal domicile in Belgium, the amount must be included in the tax declaration which the beneficiary has to make annually to the competent Controller of Taxes. In this case, tax at 6 per cent is levied in accordance with an assessment list and is collected direct from the beneficiary in Belgium (Article 20, paragraph 1, item 4, and Article 50, paragraph 2, of co-ordinated laws).
Two different cases must be considered:
(1) Interest which a foreign firm owes through its establishment in Belgium or to a creditor domiciled in Belgium.
If the foreign firm has an establishment in Belgium which pays the interest, the tax on income from personal property is paid at the full rate of 15 per cent by the debtor company, which, however, may recover the tax on the interest due. Exemption, however, is granted in respect of interest on deposits or debts of a professional character and if it is duly established that the said interest is entered in the accounts of the beneficiary establishments in Belgium.2
If the foreign firm has no establishment in Belgium, the recipient of the said interest, domiciled or resident in Belgium, must mention it in his annual declaration (see (a) above) with a view to its assessment to tax at 6 per cent.1
(2) Interest which a Belgian firm owes to a foreign firm.
In this case, tax at 15 per cent1 is collected by deduction at the time of paying the interest and subject to the right to withhold the tax from the taxable income.
A special regime, however, applies to mortgage interest. Interest from mortgages on real estate situated in Belgium is exempt from tax up to the amount of the cadastral income from such property.
If the patent is simply licensed, personal property tax is deducted at the source by the Belgian debtor at the time of paying the royalty for the licence.
If the patent is not conceded, but operated by a foreign enterprise direct, the profits from its use are treated as professional income and are liable to professional tax on the basis of an annual declaration by the recipient of such income.
Professional tax is applied to subsequent profits from the sale or surrender of a patent when the recipient of the income is domiciled for fiscal purposes in Belgium. The principle of this, however, has been questioned and jurisprudence has not given a definite ruling on the matter.
These are regarded as professional income and taxed as such. The royalties are received either direct by authors or through special non-commercial associations (sociétés civiles) having no legal entity.
In 1928 the revenue authorities entered into negotiations with these companies and it was agreed that professional tax should be collected by them at the time of distributing royalties to authors or their assigns, whatever the nationality of the recipients. For purposes of simplicity, and in order to avoid adjusting the tax to the situation of the innumerable recipients of these royalties, it was decided that the tax should be at a uniform rate of 1 ½ per cent.
It is paid into the State Treasury at the end of each quarter.
As regards beneficiaries who are neither domiciled nor resident in Belgium, this payment is regarded as final.
Recipients, however, who are domiciled or resident in Belgium are treated like other taxpayers and must include in their annual declaration the amount they have received in royalties. In order to comply with the fiscal requirements, the persons or companies that collect and distribute royalties forward to the revenue authorities at the beginning of the year individual forms for the authors on whose behalf they have paid royalties during the previous year, with the Christian name, surname and domicile of each author and the total amount of royalties paid and tax withheld. On the strength of these forms, the authorities are able to adjust the fiscal position of all those who have to make the annual return. The latter, it should be added, must contain not only royalties paid in Belgium, but those received from abroad.
Royalties received by authors direct without the intermediary of any distributing organisation must, of course, also be included in the annual declaration.1
Personal property tax is payable by deduction at source on income from leases and concessions of all personal property.
If the letting of property is in the nature of a business, professional tax is due on the annual profits from these operations.
The tax, assessed on cadastral income, is levied upon the income from all real estate in Belgium. A foreign enterprise, whether or not it has a Belgian office or business centre where the income is received, is liable to this tax in respect of any real estate it possesses in Belgium.
Income from real estate abroad which is paid in Belgium is liable to personal property tax (note 2, page 50). Accordingly, income of this kind received by the Belgian establishment of a foreign enterprise (company, partnership or individual), is liable to this tax (at 6 per cent);1 the tax is collected on the basis of the annual return of income.
Mining royalties were abolished in 1925.
On the other hand, a special 10 per cent tax1 is levied upon the lease of hunting and fishing rights and is payable by the lessees or recipients of such income, provided that the latter amounts to at least 100 francs. The tax is deducted at the source.
A foreign enterprise — individual, partnership or company — which has no domicile or establishment in Belgium, but from time to time realises a profit from the purchase and sale of real estate in Belgium, is not taxable on this score. Nor is an individual foreigner who, being domiciled or resident in Belgium, occasionally sells property at a profit. On the other hand, the revenue authorities regard as professional income liable to professional tax on industrial and commercial income any profit of this kind realised in Belgium by a foreign company having an establishment in the country. The reason for this is that, in the case of companies, all operations, even when only occasional, are considered professional.
The profit obtained by an individual from the sale of a security bought some time before at a lower price is not regarded as income. On the other hand, profits from speculative transactions by professional speculators, such as stockbrokers, are so regarded.2
In the case, therefore, of stockbrokers and other dealers in stocks and bonds, no difficulty can arise; all profits from transactions of any kind in securities invested in their commercial enterprise must be included in their accounts and figure in the balance-sheet, whether they are cash transactions, dealings for settlement or contango operations.
On the other hand, transactions effected by stockbrokers or dealers in stocks and bonds on their own private account are only taxable if they are contango operations or dealings for a settlement, these being clearly speculative transactions.
Since any appreciation of the assets of a company is regarded as profit, the tax is payable on all profits—including profits from the purchase and sale, occasional or otherwise, of securities—realised by or through the Belgian establishment of a foreign company.
Remuneration of this kind paid in Belgium by a foreign enterprise is liable to deduction of professional tax at the source at the official rates. The tax, however, may be remitted on payments to persons whose work on behalf of the Belgian establishment is done entirely abroad. But any expenses of this kind are excluded from the Belgian accounts, the law allowing of no deductions from general overhead or administrative costs except expenses of this kind incurred in the Belgian establishments themselves (Article 27, paragraph 4).
The case of income from a trust is not provided for by the law, and the revenue authorities have not as yet been called upon to apply the rules to these bodies.
In any case, a distinction must be made according to the nature of the corpus of the trust. If it is real estate, tax will be collected on the income from real estate situated in Belgium; if it is securities or debts, the income therefrom will be liable to tax and deducted at the time the income is paid or, in the case of income paid abroad, in virtue of a declaration. When such income is distributed by the trustee to the beneficiary, it will be regarded as having already been taxed, under Article 52 of the co-ordinated laws, and no further tax will be levied.
Since a foreign enterprise is taxable in Belgium if it has any kind of establishment in the country, there can be no doubt as to the liability of a foreign firm operating in Belgium under the conditions referred to under paragraphs (4) and (5) above.
As explained in Part I, on page 56, the word "establishment" must be understood in a wide sense to include head office, branch, agency, or any public and known representation by authorised agents.
Accordingly, the following have been regarded as establishments of a foreign company: an office employed exclusively in purchasing material and engaging staff for head offices in other countries and in settling the cost of orders and payment of salaries in Belgium; a local agency of a foreign railway company engaged in selling coupons, subscription books and circular tickets for journeys involving use of the company's lines; a warehouse for the storage of goods, and a forwarding office possessed in Belgium by a foreign company. Similarly, a foreign firm with subsidiaries in Belgium was deemed to have an establishment in that country when it kept on the premises of those subsidiaries a stock of goods which the company itself insured against fire. A foreign firm is further taxable in Belgium if it has a fixed agent there, whether a depositary or not, who deals on behalf of his principal. Finally, a foreign company is held to have an establishment in Belgium if its name appears on the stationery which its agent uses for his correspondence, or in the form of advertisements, a plate or sign, or in any other manner.
The rules applicable to commission agents and brokers, commercial travellers or agents with power of attorney (paragraphs (1) to (3) above) depend essentially upon the circumstances of the case.
As a general rule, if the commission agent or broker simply takes orders and passes them on to the foreign firm, without intervening in any way in the transactions between the firm and its customers (delivery of goods, payment of invoices, judicial disputes, etc.), the revenue authorities consider that there is no Belgian establishment and the foreign firm is therefore not liable to tax on profits derived from the orders thus received. The commission agent or broker must not mention the firm he represents on his stationery or by any plate or sign at his premises.
The operations of a foreign commercial traveller in Belgium do not of themselves constitute an establishment justifying the taxation of the foreign firm. Subject, however, to exceptions provided for in international conventions, such traveller is liable to a minimum professional tax of 200 francs, which he has to pay before carrying on his business in Belgium (Article 27, paragraph 4, (3) and (4)).
On the other hand, an agent with a power of attorney which allows him to engage the name of the foreign enterprise, to participate in the delivery of goods and the collection of payments, to take judicial action on behalf of the enterprise, etc., is deemed to constitute a foreign establishment, the activities of which are assessable to tax.
For the purpose of this study, a national enterprise is one whose domicile, in the case of an individual, or head office or principal establishment, in the case of a company or partnership, is in Belgium.
Such enterprise is taxable in Belgium, not only on all profits earned in the country, but on those earned abroad; the latter, however, are taxed at reduced rates (Article 34, paragraph 1, item 4, and article 35, paragraph 7, of co-ordinated laws) and are exempt from additional tax by provinces and communes.
Tax is assessed on the total results of the enterprise (Belgian and foreign offices), which means that profits and losses are balanced against each other, so that, if the total operations result in a deficit, no tax is payable.
To ensure the execution of these legal provisions, national enterprises have to attach to their annual declaration, not only the general accounts, but a copy of the separate balance-sheet and profit-and-loss account of the foreign establishments (Article 54, paragraph 1 (3), of the laws above-mentioned). These separate accounts include all income, of any kind whatever, derived from foreign sources.
The tax on income from personal property is levied at the rate of 6 per cent1 on foreign dividends received by the Belgian company; the tax is deducted at the source by whoever pays this income in Belgium. If it is paid directly abroad, it must be mentioned in the annual return made by the enterprise to the competent Controller of Taxes, who then collects tax at 6 per cent direct from the company.
Interest (on bonds, debts, deposits, loans, etc.) from a foreign source is also liable to tax on income from personal property at 6 per cent, according to the method mentioned under (a).
See what has been said above (pages 69 et seq.) in connection with foreign enterprises, noting, however, that the income in question is taxable at reduced rates if earned and taxed abroad.
If the national enterprise is directed by an individual, professional tax alone is due, a reduced rate being applied to that part of the tax corresponding to profits earned and taxed abroad.
In the case of partnerships, the legal entity is liable to professional tax on profits placed to reserve, income of foreign origin being taxed at a lower rate than income of Belgian origin. Active partners are liable to professional tax on the sums distributed to them, including any interest on capital they have invested in the partnership. A reduction of rate is allowed in respect of parts of these sums which represent profits taxed and earned abroad. Sleeping partners (bailleurs de fonds or commanditaires) pay tax on income from personal property, subject to the same reduction of rate on foreign income.
The same principle (reduction of rate) applies to profits placed to reserve by share companies (sociétés anonymes) and limited partnerships with share capital (sociétés en commandite par actions); in the case of distributed profits (dividends), personal tax is imposed at a reduced rate on that proportion of income from shares corresponding to profits earned and taxed abroad.
Belgium has concluded bilateral Conventions for the avoidance of double taxation with the Grand-Duchy of Luxemburg, France and Italy. Ratifications have so far been exchanged with the Grand-Duchy and Italy.
The texts of these Conventions are not uniform, for the fiscal systems of the four contracting States are in certain respects so different that no one solution could be found wholly acceptable to each of them.
Nevertheless, the provisions are substantially the same as far as concerns liability to tax on income from land and buildings, the taxation of the income of industrial, mining, commercial or agricultural enterprises, income from labour, fees of directors and auditors of share companies, public and private pensions and annuities.
The taxation of income from securities is not dealt with in the Convention with the Grand-Duchy of Luxemburg owing to fundamental differences in the fiscal treatment of such income by the two countries. It was omitted from the Convention with Italy because the interests affected are of very secondary importance. On the other hand, the question has been amply treated in the and private Convention with France.
The Conventions define fiscal domicile as follows: The fiscal domicile of individuals is the place where they normally reside — that is, where they have a permanent home. Companies and partnerships having a separate legal entity are domiciled for fiscal purposes in the place where they have their real head office; the fiscal domicile of other legal entities is their real centre of direction or management.
From the standpoint of Belgian law, therefore, the conception that determines the fiscal domicile of individuals is residence (see page 49); in the case of companies and partnerships with a separate legal entity, the determining factor is their real head office, which is usually synonymous with the principal establishment as laid down by Belgian fiscal law. The real centre of direction or management, constituting the fiscal domicile of other legal entities, likewise coincides with the principal establishment as understood by Belgian jurisprudence.
From this point of view, the Conventions do not introduce any essentially new principle into co-ordinated Belgian law.
In principle, the Belgian tax on income from personal property is collected from dividends at the source at the full or reduced rate according to their Belgian or foreign origin.
The Conventions with France and Italy provide that income from shares and similar forms of participation shall be taxable in the country where the real head office is situated.1
As an exception, however, to this rule, the Franco-Belgian Convention prescribes that income from securities (public debentures, shares or other certificates issued by companies, bonds or other loan scrip) is liable to impersonal tax in the State where the beneficiary has his fiscal domicile, to be collected according to the laws of that country. In this case, however, the State will deduct from this tax the tax already paid on the same income in the other country.
In view of the present incidence of taxation in France and Belgium, it was agreed that this provision should be applied as follows:
As regards Belgium, and in so far as the general tax rate on income from foreign securities does not exceed 12 per cent,1 this tax will not be payable on income from French securities accruing to persons having their fiscal domicile in Belgium. Should the general rate exceed 12 per cent, it will be reduced by 12 per cent in respect of these securities. As regards France, the general rate of the tax on income from foreign securities will be reduced by 12 per cent in the case of Belgian securities.
Further, French share companies having their fiscal domicile in France and a permanent establishment in Belgium may, when making their annual return in Belgium, apply to be treated like Belgian share companies; in this case, the tax on dividends is assessed on a fraction of the Belgian profits equal to the ratio between the distributed profits of the company and its total profits, provided, however, that the sum assessable to the taxes on professional and personal property income does not exceed the total Belgian profits.
A French company which asks for this treatment will have to pay: (i) the tax on income from personal property at the full rate applying to share income on the portion of Belgian profits determined by the above-mentioned ratio; (ii) professional tax at the ordinary rates on the remainder of those profits, whereas, at present, the whole of the taxable profits earned in Belgium are liable to professional tax at 10 per cent.
At the same time, the total income liable to personal property and professional income taxes may not exceed the Belgian profits.
Under ordinary law, personal property income tax is payable in Belgium, by deduction at source or on an annual return, in respect of all interest paid or received by a person who has his domicile or residence in Belgium.
The Conventions concluded with France and Italy depart from this principle when they lay down that income of this kind is taxable in the country where the person owing the income is situated; no attention is thus paid to the domicile of the recipient.
If, however, the debtor has permanent establishments in both countries and if one of these establishments contracts a loan or receives a deposit in the strict course of its business, the tax is collected by the State in which the establishment is situated.
Under the Conventions, copyright royalties are taxable in the country where the beneficiary has his fiscal domicile.
Consequently, professional tax can no longer be collected in respect of copyright royalties paid in Belgium to persons whose fiscal domicile is in the Grand-Duchy, France or Italy.
Contrary to the rule of Belgian fiscal law, whereby income from real estate received abroad by a person domiciled or resident in Belgium is liable to personal property tax, the Conventions concluded with the Grand-Duchy of Luxemburg, France and Italy provide that the income from real property, or the property itself, is taxable only in the State where the property is situated.
Normally, remuneration paid in Belgium, including the fees of directors of share companies, is subject to deduction of professional tax at source; further, remuneration received abroad by a person domiciled or resident in Belgium is liable to professional tax on the basis of an annual declaration. The tax, however — which is fixed by the Belgian commune where the taxpayer is domiciled or resident — is computed at a reduced rate if the income is earned and taxed abroad.
The Conventions lay it down as a rule that the fees of company directors and of others discharging similar functions are taxable in the State in which the enterprise has its real head office.
The various payments to salaried workers and wage-earners are taxed in the country in which the taxpayer is working.
The salaries of the public servants of one country who exercise their functions in the other are taxed only in the country which pays them.
Finally, public and private pensions are taxed in the country which owes this income, annuities in the country in which the recipient has his fiscal domicile.
Accordingly, tax will in future be collected, in respect of the income mentioned above, by one State only: in the case of directors, etc., of share companies, by the country in which the enterprise has its real head office; in the case of salaried workers and wage-earners, by the country where they do their work; in the case of public servants, by the country which pays them; in the case of pensions, by the country which owes them and, in the case of annuities, by the country in which the recipient has his fiscal domicile.
According to Belgian law, a national enterprise which has establishments abroad is liable to tax in respect of all its Belgian and foreign profits, but profits earned and taxed abroad are taxed in Belgium at a reduced rate.
Under the Conventions, industrial, mining, commercial and agricultural enterprises are taxable in each State only in proportion to the income earned by permanent establishments therein.
This is a modification of the Belgian regime, since it exempts from tax in Belgium profits realised in the Grand-Duchy, France and Italy by Belgium enterprises which have establishments in those countries.
It was explained on page 56 that a foreign enterprise is taxable in Belgium if it has any kind of "establishment" in that country, the term "establishment" being interpreted in a very wide sense to cover anything between a centre of operations and some recognised public representation by authorised agents.
The Convention concluded by Belgium with the Grand-Duchy of Luxemburg restricts the term to somewhat narrower limits. By permanent establishment are to be understood centres of effective management, branches, factories, workshops, agencies, shops, offices and depôts. The fact that an enterprise established in one of the two contracting States maintains business relations with the other country through a really independent agent or company (broker, commission agent, subsidiary, etc.), does not imply that the enterprise has a permanent establishment in the latter country.
Subject to this same reservation, the Conventions concluded with France and Italy define the term "permanent establishment" so as to include purchase and sales offices and any other fixed installation of a productive character. On the other hand, the Convention with France provides that offices which merely buy goods to supply them to one or more selling or processing establishments of the enterprise in the other country shall not be taxable — subject, of course, to reciprocity.
The question of complementary tax did not arise in connection with the Grand-Duchy of Luxemburg, which has no such separate impost. Nor was it dealt with in the Franco-Belgian Convention.
The Convention with Italy, however, lays down that a taxpayer is liable to complementary tax only in the country where he has his fiscal domicile.
If a person domiciled in Italy has a second residence in Belgium, he is fiscally domiciled in both countries, and the Convention provides that in that event he would be liable to complementary tax in Belgium in proportion to the length of his visits to that country, whereas, under Belgian law as it now stands, personal tax would be due for the whole year.
Under existing fiscal law, foreign firms are taxable on profits resulting from any operations conducted by or through their Belgian establishments.
Subsidiaries are generally regarded as separate and independent legal entities and are therefore subject to the fiscal regime of the Belgian companies whose form they have adopted. They are thus liable to income-tax in accordance with the statements in their own accounts, which have to mention separately the results of their Belgian and foreign operations, for the purpose, more particularly, of applying a reduced rate of taxation to profits earned and taxed abroad (see page 56).
The question of allocation arises therefore only as regards branches of foreign enterprises.
In principle, a foreign firm which has a branch in Belgium must itself declare the income earned by the establishment and in support of its annual return must produce the separate accounts of that establishment referred to in Article 27, paragraph 4, second sub-section.
These accounts are not specified in detail in the fiscal law; they may consist of the day-book and other books commonly used in business and the use of which is prescribed in Article 16 of the Law of December 15th, 1872 (Commercial Code).1
In any event, the separate accounts must permit of the drawing up and checking of the separate balance-sheet and profit-and-loss account relating to business done by the establishments, or a summarised statement showing by classes the various operations conducted by these establishments and the total profits resulting therefrom.2
Should such accounts not be kept or should the results not be produced, or if the revenue authorities have serious reason to believe that the accounts do not reveal the real results of operations, the profits of the foreign establishment may be determined either empirically or by the method of comparison provided for in Article 28 of the co-ordinated laws.
The separate accounts of the branch must include all operations transacted in Belgium by or through the branch. It does not matter whether the business is done with persons in the country or with foreigners. Nor does it matter whether the operations are initiated by the Belgian establishments or are simply conducted through their agency. The operations will in both cases be entered to their account for purposes of determining the profits earned in Belgium.
The accounts will include, for instance, interest received in Belgium and profits from the investment of money by the Belgian branches at the direct orders of the head office.
On the other hand, the only deductions allowed under general or administrative costs of the Belgian establishments are expenses of this kind incurred by the said establishments.
Deductible expenses do not include interest, premiums or prizes paid by the said establishments to bond-holders, nor fees paid to directors and auditors out of the profits earned in Belgium — except when schedular taxes have been paid under this head in Belgium.
In the absence of exact allocation evidence derived from accounts kept in accordance with the Commercial Code, or documents confirming with sufficient accuracy the income declared, foreign firms operating in Belgium are taxed on a certain minimum profit, fixed as explained below, the tax, however, being not less than 10,000 francs (Royal Decree of October 8th, 1930,1 issued in execution of Article 28 of the co-ordinated laws):
The separate accounts can, of course, be checked by the revenue authorities, who are in no way bound by the information in them. As in the case of the balance-sheets of Belgian enterprises,2 this control may consist in demanding explanations and further evidence whenever the fiscal agents think fit. This applies especially to the prices at which goods have been invoiced by the parent enterprise to its branch or subsidiary. If the Controller has reason to believe that these prices are higher than those invoiced by similar enterprises or those officially quoted, he may disregard the figures in the accounts. In this case, the presumed additional profit is added to that shown in the accounts; or, if the figures are altogether unreliable, the authorities may wholly disregard them and assess tax ex-officio.3
The same care is needed when the separate accounts contain mention of interest on loans and advances paid to the parent enterprise, or of sums due for management or engineering service, use of patents, etc.
As regards interest on loans and advances, the only deduction allowed under the heading of professional charges (Article 26, paragraph 2, of the co-ordinated laws) is interest on capital borrowed from third parties and invested in the business; since the branch does not constitute a third party vis-à -vis the parent firm — the head office and Belgian branch being two parts of one organisation — the revenue authorities include this interest among the profits of the Belgian establishment.
Sums paid for management and engineering service imply the exercise by the parent enterprise of activities in Belgium, and the revenue authorities levy professional tax on the foreign enterprises in respect of the net profit from these activities.1
Lastly, royalties paid to the parent enterprise for the lease, concession or use of patents come under Article 14, paragraph 4, of the co-ordinated laws, by which the total amount is assessable to personal property income tax.
The revenue authorities are not, however, bound exclusively to the empirical method; they may also fix the taxable income by a method of comparison, regard being had to the normal profits of taxpayers similarly situated and, as the case may be, to invested capital, turnover, number of workmen, motor-power used, rental value of exploited land and any other useful information (Article 28 of the co-ordinated laws), should this method seem more likely to reveal the true facts. In practice, however, the empirical method is the normal substitute for accounts; recourse to the comparative method is exceptional.
The criteria on which the latter method is based are the bona-fide declarations of taxpayers who keep regular accounts and operate under similar conditions. The law does not prescribe any particular element of comparison (invested capital, turnover figure, number of workmen, etc.). This is left to the discretion of the fiscal agents, provided only that the method employed shall succeed in fixing as closely as possible the presumed profits on which tax is to be assessed.
If the company fails to produce reliable accounts and should the application of the empirical or comparative method not be thought satisfactory, the taxable income may also be determined as a fraction of the total income of the foreign company. In this case, the latter is required to furnish the revenue authorities with the general accounts of the enterprise and all other information necessary to assess tax on an equitable basis. There are no express administrative provisions to this effect, but the general purpose is to harmonise as closely as possible the various documentary evidence at the disposal of the fiscal agents.
The question really only affects foreign companies operating in Belgium through a branch, as subsidiaries mostly have a separate legal existence involving taxation on their own account.
In principle, allocation is based upon the taxpayer's declaration, supported by the separate accounts2 and subject to checking by the revenue authorities. If there are no special accounts or if they are not sufficiently trustworthy, allocation may be made empirically. The empirical or comparative method is only used if there are special reasons for doing so and if the taxpayer agrees to it.
The most practical and satisfactory method is taxation in accordance with accounts susceptible of being verified by the Administration. If it cannot be employed, an empirical method offers an alternative solution, although it is not always in accordance with the facts.1
In actual practice, however, the revenue authorities are satisfied with any method of assessment which will furnish as exact an estimate as possible of the profits earned by a foreign firm in Belgium.
When assessing the profits derived from operations carried on in Belgium, no fraction of these profits is attributed to the real centre of management abroad.
As explained above (page 78), tax is assessed in Belgium upon the profit from all operations conducted in the country by or through the Belgian establishments, the only deduction allowed being the professional expenses of the Belgian office. The Belgian establishment is considered separately for the purpose of determining profits and therefore none of these are ascribed to the real centre of management abroad.
Jurisprudence has decided that, in the case of Belgian enterprises which earn profits abroad, interest charges are ascribed to the head office. The only exception is when the debt has been contracted abroad on behalf of establishments situated abroad.
Applying this jurisprudence, the revenue authorities consider that the interest payable on a general debt of a foreign enterprise is ascribed to the real centre of management, unless it is clearly established in law that the debt was contracted in Belgium by the Belgian establishment for its own requirements; in the latter case, the interest is liable to personal property income tax in Belgium.
As regards foreigners operating in Belgium, the only general overhead or administrative expenses which may be deducted are expenses of this kind incurred by the Belgian establishments (Article 27, paragraph 4, of co-ordinated laws).
Deductible expenses — subject to what was said above about interest charges — do not include interest or premiums paid by these establishments to bond-holders, or fees paid to directors and auditors out of profits earned in Belgium.
If there is any doubt as to the accuracy of general overhead or administrative expenses as shown in the accounts, details are asked for.
Foreign enterprises are taxed on the profits from all operations conducted by or through their establishments in Belgium. No regard need therefore be had to any loss in the results of the entire enterprise; none of this loss can likewise be ascribed to the separate accounts of the Belgian branch.
Applying the above principles, the taxable basis is fixed with exclusive regard to the results of the Belgian establishment. If the separate accounts reveal a loss and are found by the fiscal agents to be in order, no tax will be levied in Belgium, even though the entire enterprise should realise a profit.
There is no apportionment of profits between parent branch and subsidiary, the latter being regarded in Belgium as independent and liable in respect of all its profits to fiscal rules of its own.
In principle, a foreign establishment in Belgium has to keep separate accounts of its Belgian operations. If the results shown by these accounts are accepted, assessment is on this basis, but, if not, recourse will be had to one of the methods referred to under "General Questions and Methods of Apportionment".1
The profit from sales may be determined (in Belgian francs) by deducting from the sale price: (a) the value of the goods at the time they were consigned to Belgium; (b) the cost of transport to Belgium including insurance and import duties; (c) costs of handling, storage, warehousing or packing in Belgium prior to sale; (d) other general expenses in Belgium in connection with these operations.
In principle, the production of the original sales invoices allows the fiscal agent to satisfy himself that these prices are normal having regard to the prices of the same goods produced in Belgium. In the case of special articles without any known current price, the Controller may refuse to accept the accounts if he has reason to doubt their accuracy; in this case assessment will be on an empirical basis.
Profits derived from sales to customers abroad are all ascribed to the branch in Belgium, when the sales were effected through that branch. The law does not prescribe what part the Belgian establishment must play in order that it may be regarded as the agent of sale. In practice, all operations are ascribed to the branch which are concluded by it with the third State, even if they required the authorisation of the real centre of management.
No legal provision ascribes to a manufacturing establishment a given part of profits from the sale abroad of goods manufactured in the country. The revenue authorities have to examine in each case whether and to what extent the manufacturing establishment is to be regarded as having earned profits in Belgium.
In principle, a permanent establishment situated in Belgium has to keep separate accounts of all operations conducted in the country, including purchases made on behalf of the principal enterprise. Assessment is based either on these accounts or on one of the methods already mentioned.
The foreign enterprise is not taxable if purchases are made from a local subsidiary, which, being regarded as an independent company, is taxed on the whole of its profits.
Profits could be ascribed to establishments of this kind in Belgium, on the principle that a foreign enterprise is taxable if it has an establishment in Belgium. The revenue authorities have decided that a foreign company wishing to establish an office for supervision and control in Belgium shall be deemed to have an establishment there. If, however, the separate accounts show no profits and, on being produced, are accepted as being in order, no tax is levied.
No special method of assessment is used for these institutions. Their income is determined either on the basis of their separate accounts, if approved, or empirically; the latter method prescribes for these enterprises a minimum taxable profit of 15,000 francs per employee, taking the average number of employees for the year in question.
The revenue authorities are not aware of any case in which the comparative method has had to be used.
In principle, profits are determined from the separate accounts. It may be remembered (see page 60) that these accounts are not required to show profits separately according to the class of contract (life insurance, temporary, mixed, etc.), but only according to the branch of insurance (life, fire). On the other hand, the separate accounts must include: the gross premiums (see note 3 on page 60) collected by the Belgian agencies without deducting premiums surrendered to reinsurance companies; the reserves corresponding to policies concluded by these agencies or contracted in Belgium by agents domiciled abroad; interest on these premiums and reserves; compensation paid by the Belgian agencies; the latters' general expenses; and, lastly, reinsurance operations relating to policies concluded by the Belgian agents or contracted in Belgium by agents domiciled abroad, etc.
For purposes of uniformity, the Administration has prescribed the production of a standard profit-and-loss account containing all the information required.
In the absence of properly kept accounts, or if such are not produced, the empirical method is employed, with the following minimum profits:
Life insurance: 20 francs per 1,000 francs of paid premiums;
Maritime insurance: 25 francs per 1,000 francs of paid premiums;
Other insurance: 60 francs per 1,000 francs of paid premiums;
The comparative method has not as yet had to be applied.
Same as for (b). Under the empirical method, however, the minimum taxable profit is 150 francs per 1,000 francs of receipts, but not less than 10,000 francs per employee and workman; in the case of railways, the minimum is 3,000 francs per employee and workman (average number for year in question).
The Government is authorised to conclude international agreements granting, subject to reciprocity, complete fiscal exemption to the income of foreign shipping enterprises domiciled in Belgium. Agreements of the kind have been concluded with Norway, Denmark and Iceland, Finland, Ecuador, Sweden and France, and negotiations are proceeding with other countries.
Same as for (b); if the empirical method is used, the minimum profit is 150 per 1,000 francs of receipts, but the taxable income must be not less than 10,000 francs per workman and employee.
In Belgium, telegraphs and telephones are operated by a Government monopoly, which is not taxable.
Same as for (b); the empirical method assumes a minimum profit of 3,000 francs per employee and workman (average number for year in question).
Same as for (b); the empirical method presupposes a minimum profit of 150 francs per 1,000 francs of receipts, with a minimum taxable income of 10,000 francs per workman and employee.
National enterprises which make profits from separate establishments abroad have to attach to their annual declaration a copy of the separate balance-sheets and profit-and-loss accounts of these establishments (Article 54, paragraphs 1, (3), 2).
For the rest, reference may be made to page 60 "National Enterprises operating abroad".
In this matter, the revenue authorities rely upon the accounts, if these appear to be in order, and if the accounts show that all the profits are of foreign origin, the law forbids any part of them being ascribed to the real centre of management.
Holding companies, like companies with their head office or principal administrative establishment in Belgium and separate establishments abroad, have to keep accounts of the income they derive from both Belgian and foreign sources. Dividends and interest paid in Belgium are liable to deduction of personal property income tax at the source at full or reduced rate, according as the income is of Belgian or foreign origin. In the case of foreign income paid abroad, the holding company has to declare it and pay personal property income tax on it at reduced rate.
Since such income, both Belgian and foreign, must not be taxed twice, the profits of these companies corresponding to the net dividends they receive may be used to build up or add to their reserves, or may be distributed to the shareholders of the company, without payment of any further tax.
The same rule applies to debenture interest and coupons on bonds or to other interests. If this income has paid personal property income tax, its net amount is not liable to further tax when included among profits placed to reserve or distributed.
In conformity with the principles explained in Part I, local subsidiary companies are taxed on their total profits both Belgian and foreign, those earned in Belgium being taxed at full rate, those made abroad at a reduced rate. The local company pays the personal property income tax for which it is liable when it pays its dividend, so that the foreign holding company receives income on which Belgian tax has been duly paid. At the same time, the holding company itself is not regarded as liable to tax in Belgium, since it has neither its head office nor its chief administrative establishment in the country.
In principle, a taxpayer who has his head office or principal establishment in Belgium and other establishments abroad is taxed on the whole of the profits earned in Belgium and abroad. Tax is assessed on the basis of the general balance-sheet and of the special profit-and-loss accounts relating to the business of the separate foreign establishments, the foreign profits being taxed in Belgium at a reduced rate if already taxed abroad.
According to the Conventions concluded with the Grand-Duchy of Luxemburg, France and Italy, industrial, mining, commercial and agricultural enterprises are taxable in each country in proportion to the income earned by the permanent establishments therein.
This procedure constitutes a departure from the normal rule. The Belgian authorities will therefore no longer tax the profits of establishments in the Grand-Duchy, France and Italy, but the profits of establishments situated in other non-contracting States will continue to be subject to ordinary Belgian law.
Allocation will be based on regular accounts. If there are no regular accounts showing the income separately and accurately, the competent authorities of the contracting States will, if need be, agree upon certain rules of apportionment.
In this matter, the Conventions make little change in Belgian fiscal law: the foreign enterprises will be taxable in Belgium only if they have a permanent establishment there. The tax will be assessed exclusively on profits earned in Belgium by or through the said establishment, and these profits will not be taxed in the other country.
The Convention with Italy, however, prescribes that the profits of shipping and air navigation companies, including profits from the sale of tickets, shall be taxable only in the country in which the enterprise has its real head office, provided that the vessels or aeroplanes belong to that State.
Percentage rate of tax
1. Income from shares in commercial or non-commercial companies and partnerships having their head office or principal administrative establishment2 in Belgium, except as provided in No. 11 below3 22
2. Income from bonds or other debts incurred by the companies or partnerships mentioned in No. 1, except as provided in No. 13 below3 15
3. Income from debts4 incurred by individuals or companies and partnerships other than those mentioned above 15
4. Income from deposits4 other than those specified under Nos. 8 to 11 below 15
5. Income from the rent, lease, use or concession of all personal property (but see, as regards hunting and fishing rights, letter D below) 15
6. Income from capital invested in companies, other than share companies, by sleeping partners 105
7. Income from bonds issued by the Belgian State, the provinces, communes and other public bodies1 and from debts incurred by them 2
8. Income from deposits with the Caisse générale d'Epargne et de Retraite and the Caisse des Dépôts et Consignations2 2
9. Income from deposits with other public savings banks2 3 2
10. Income from loans granted after July 1st, 1932, to agricultural or commercial enterprises which have their seat in Belgium, provided it is shown that such loans were specially intended to provide employment4 2
11. Income from deposits with private savings banks satisfying certain conditions 2 3 5 5
note note note note note note note note note
12. Income from shares, referred to in No. 1, in a proportion corresponding to profits earned and taxed abroad6 6
13. Income of foreign origin other than that mentioned above (income from foreign shares or bonds, foreign State funds, foreign debts, foreign deposits, real estate situated abroad, etc.) 6
14. Income from bonds issued abroad for the needs of foreign establishments7 5
15. Income from sums of money deposited in Belgium by individuals or legal entities having no domicile, residence or establishment in the country8 5
note note note
16. Premiums of prizes of national public funds:
Not exceeding 25,000 francs 3
Not exceeding 100,000 francs 6
Exceeding 150,000 francs 10
17. Yield from lease of hunting and fishing rights1 10
Income2 (in francs) Percentage applicable to the total amount of income$$$2 Amount of the tax corresponding to the income equal to the first figure of the "Income" column (in francs)3
1. Not exceeding 50,0004
2. Exceeding 50,000:
50,000 to 60,000 5.0 2,500
90,000 to 110,000 6.5 5,850
110,000 to 130,000 7.0 7,700
150,000 to 175,000 8.0 12,000
200,000 and upwards 9.0
Taxable basis1 (in francs) Percentage applicable to the total amount of the taxable basis Amount of tax corresponding to the income equal to the first figure of the "Taxable basis" column (in francs)
1. Not exceeding 15,000 nil Nil
2. From 15,000 to 25,000 1 150
25,000 to 50,000 1.5 250
50,000 to 75,000 2 625
100,000 to 125,000 3 1,750
225,000 to 250,000 10 8,250
250,000 to 275,000 12 10,750
350,000 and over 20 25,750