Since March, many companies have been under pressure. The economic impact of the major health crisis that we are going through are now weighing on both States and economic players. In this context, in order to face it and to limit losses, everyone seeks to activate the right levers at their disposal. “For some, the turnover has dropped considerably. Some of the business is slowing down. To try to maintain profitability, efforts must be concentrated on cost management” explains Laurent Bodart, Tax Coordinator at ABV Development.
Industry is strongly impacted
At the industry level, companies can activate levers to reduce their tax burden, in particular by reducing the impact of real estate tax. “Alongside tourism, hospitality and events, industry is one of the sectors most affected by the crisis in Belgium. Most often, the players in the sector face a (significant) slowdown in activity with while also having heavy investments made. Beyond the obligations to reimburse materials and tools, cadastral income and the associated taxation also weigh heavily on costs. Many of the temporary aid measures taken by the government to support economic actors lie in the possibility of deferring certain payments. But the sums 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 possibilities are available to manufacturers in order to reduce the tax burden incumbent on them and to try to preserve the year. "First of all, it is interesting to clean the tax base, removing all elements that should no longer be there," explains Laurent Bodart. Some elements can also benefit from tax exemptions, such as water treatment units when used before water release. By establishing a faithful image of the present equipment, we can often already reduce the taxation linked to cadastral income. "
Taking advantage of a property tax reduction for unproductivity
A second important factor lies in the possibility of claiming tax reductions linked to the inactivity or unproductive nature of the 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 in the property tax, explains Laurent Bodart. This reduction applies to equipment over 15 years old (resp. 22 years old in Flanders) to the extent that, since 2005-2006 (resp. 1998 in Flanders), all new investments are exempt. Within industry, these investments of more than 15 years (resp. 22 years) can be significant."
In practice, however, this opportunity may prove difficult to grasp, given the strict conditions to be met, both formally and substantively. We are also seeing a tightening by the Administration with regard to the acceptance of cases, leading to longer, more complex files, and requiring more justification. In order to maximize the chances of a successful outcome, it may be wise to go through a subject matter specialist. "
ABV Development supports you in reducing tax burdens
"Relying on extensive expertise in this field, and on in-depth knowledge of tax regulations, the ABV Development team supports companies in getting through the crisis, by activating the levers allowing them to reduce their costs and be better equipped to face the future, explains Laurent Bodart. For each client, we propose to study the tax base to assess how to optimize it, and to identify measures to reduce the financial burden in the short and medium terms. In this time of crisis, any savings is worth taking."