How to reduce the tax burden to weather the crisis better?

Since March, many businesses have been under pressure. The economic effects of the major health crisis we are going through are now weighing on both States and economic actors. In this context, everyone seeks to mobilize the levers at their disposal to deal with them, by limiting losses. ” For some, turnover has fallen considerably. Some of the activity is idling. To try to maintain profitability, efforts must be focused on managing costs. ”, explains Laurent Bodart, Tax Coordinator within ABV Development.

The industry is strongly impacted

At the industry level, businesses can activate levers to reduce their tax burden, in particular by reducing the impact of property tax. ” In addition to tourism, catering and events, the industry is one of the sectors most affected by the crisis in Belgium. Most often, players in the sector face a (significant) slowdown in activity with, despite everything, heavy investments to assume. In addition to the obligations to reimburse equipment and tools, cadastral income and associated taxation also weigh heavily on costs. Many of the temporary aid measures taken by the government to support actors lie in the possibility of deferring certain payments. But the amounts are still due, continues the tax expert. There is a real challenge in minimizing tax costs. ”

Clean up the tax base to reduce the tax burden

Several options are available to manufacturers in order to reduce the tax burden on them and try to preserve the year. ” First of all, it is interesting to clean up the tax base, by removing all the elements that no longer need to be found there., explains Laurent Bodart. Some elements present may also benefit from tax exemption, for example in the case of a water treatment unit before discharge. By establishing a faithful image of the equipment present, we can often already reduce the taxation linked to cadastral income. ”

Take advantage of a reduction in property tax for unproductivity

A second challenge lies in the possibility of claiming a reduction in the tax burden linked to the inactivity or unproductivity of equipment and tools. ” In Wallonia, for any downtime of at least 90 days on an annual basis, affecting at least 25% of the cadastral income of the equipment and tools concerned, it is possible under certain conditions to request a reduction of the property tax, explains Laurent Bodart. This rebate applies to equipment over 15 years old insofar as, since 2005-2006, all new investments have been exempt. Within the industry, these investments of more than 15 years can be significant. ”

“In practice, however, this opportunity can be difficult to seize, given the strict conditions that must be met, both in substance and in form. We are also seeing a tightening up by the Administration in accepting cases, leading to longer, more complex cases, and requiring more and more justifications. In order to maximize the chances of a successful outcome, it may be a good idea to work with a specialist in the field.”

ABV Development helps you reduce the tax burden

” Based on extensive expertise in this field, and on a detailed knowledge of tax regulations, the ABV Development team helps companies get through the crisis, by activating these levers allowing them to reduce their costs, and thus be able to better understand the future., explains Laurent Bodart. For each client, we propose to study the tax base to see how to optimize it and consider measures to alleviate the financial burden in the short and medium term. In this period of crisis, any economy is good to take.”