Belgium November Paying Taxes th edition

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1 Belgium Paying Taxes th edition

2 The Paying Taxes methodology The three sub-indicators Both the tax cost and the tax compliance burden are important from the business point of view and these are measured using three sub-indicators Paying Taxes 2016 PwC 2

3 The Paying Taxes methodology Paying Taxes records the tax cost and administrative burden for a local medium-sized business in its second year of operation Limited liability taxable company Operates in the country s largest business city 100% domestically owned Has 60 employees: 4 managers, 8 assistants and 48 workers Performs general industrial or commercial activities Does not participate in foreign trade Has a turnover of 1,050 times income per capita Paying Taxes 2016 PwC 3

4 Why is Paying Taxes more relevant this year? The public and many policymakers have become increasingly interested in how international tax systems operate The Base Erosion and Profit Shifting (BEPS) project carried out by the OECD for the G20 has provided a focus for international taxation The BEPS project does not consider many issues that are important to developing economies These issues may include enhancing administrative capacities of tax authorities, reduction of the informal economy and corruption, and promoting growth and investment Governments continue to deal with a tension between the need to raise revenues and at the same time to encourage economic growth Paying Taxes 2016 PwC 4

5 Total Tax Rate comparison across the globe Middle East 9,4 14,2 0,6 24,2 Central Asia & Eastern Europe 12,9 18,8 3,5 35,2 Asia Pacific 17,6 10,5 7,5 35,6 North Anerica 19,2 16,0 3,7 38,9 EU & EFTA 12,6 26,5 1,5 40,6 World average 16,2 16,2 8,4 40,8 Central America & the Caribbean 22,3 12,2 7,6 42,1 Africa 17,7 14,9 14,3 46,9 South America 16,7 16,4 21,9 55, Profit taxes Labour taxes Other taxes World average 40.8% Belgium 58.4% Paying Taxes 2016 PwC 5

6 Total Tax Rate Total Tax Rate Belgium and EU & EFTA (%) 70,0 EU & EFTA average: 40.6% Belgium:58.4% 60,0 50,0 40,0 30,0 20,0 10,0 0,0 EU&EFTA economies Profit taxes Labour taxes Other taxes Group average Paying Taxes 2016 PwC 6

7 Time to comply (hours) Time to comply Belgium and EU & EFTA EU & EFTA average 173 hours Belgium: 161 hours EU&EFTA economies Corporate income tax Labour taxes Consumption taxes Group average Paying Taxes 2016 PwC 7

8 Number of payments Number of payments Belgium and EU & EFTA EU & EFTA average 11.5 payments Belgium 11 payments EU&EFTA economies Profit Taxes Labour taxes Other taxes Group average Paying Taxes 2016 PwC 8

9 The global average results The three sub-indicators On average it takes our case study company 261 hours to comply with its taxes, it makes 25.6 payments and has an average Total Tax Rate of 40.8%. Paying Taxes 2016 PwC 9

10 What the Paying Taxes results show Belgium the three sub-indicators 2014 Total Tax Rate 58.4% Time to comply 161 hours Number of payments 11.0 TTR ranking: 164/189 (2013:164) and 30/32 (Europe) TTR: 58.4% (the same as last year) vs. European average 40.6% Time to comply ranking: 59/189 (2013:57) and 18/32 (Europe) Number of payments: 51/189 (2013:48) and 20/32 (Europe) Paying Taxes 2016 PwC 10

11 Global average results Movement in sub-indicators All three sub-indicators (Total Tax Rate, time to comply and number of payments) have decreased when we review for absolute numbers. In Belgium, time to comply increased by 1 hour, and the TTR and number of payments remained unchanged. Paying Taxes 2016 PwC 11

Global average results Most common reforms From 2004 2009 most common reform was the reduction of profit taxes.

12 Global average results Most common reforms From most common reform was the reduction of profit taxes. From , the most common reform was the introduction and improvement of electronic systems. Paying Taxes 2016 PwC 12

13 What s next for Paying Taxes sub-indicators - Post filing compliance Most businesses are subject to post-filing procedures such as claiming a VAT refund or undergoing a tax audit (meaning additional compliance work). Doing Business, as a pilot this year, is expanding the analysis of Paying Taxes to include three aspects of the post-filing process: Settlement of VAT refund claims; Tax audit processes; and Tax appeals The World Bank is still analysing the data collected this year and it will be released in early It is not included in the Paying Taxes indicator or ranking this year. November 2016 Paying Taxes 2016 PwC 13

14 Thank you! PwC helps organisations and individuals create the value they re looking for. We re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details

Paying Taxes 2015: The global picture. The changing face of tax compliance in 189 economies worldwide. Paying Taxes

Paying Taxes 2015: The global picture. The changing face of tax compliance in 189 economies worldwide. Paying Taxes 2015 www.pwc.com/payingtaxes Contacts PwC 1 Stef van Weeghel Leader, Global Tax Policy