FREQUENTLY ASKED QUESTIONS (FAQ)

Transcription

1 FREQUENTLY ASKED QUESTIONS (FAQ) Q1 What is the additional tax on revenue income? Q2 Who is subject to the additional tax on revenue income? Q3 How will the additional tax on revenue income be levied? Q4 Which revenue incomes are subject to the additional tax? Q5 As from what amount will the additional tax be owed? Q6 Which incomes are taken into account for the computation of the threshold of 20,020 euros? Q7 Who is the person responsible for the application of the additional tax? Q8 How is the communication of information to the Central Point of Contact (CPC) organised? Q9 Treatment of joint accounts (accounts with two or more joint holders) Q10 The obligation to declare revenue incomes in the annual tax return Q11 How is interest applied to money deposited on regulated savings accounts (Green Savings Account, Orange Savings Account, ING Lion Deposit, ING Lion Premium, ING go to 18 Savings Account)? Q12 The 2012 interest statements mentioned that information was required to be shared with the Central Point of Contact... What s up with this obligation? Q13 At the end of last year, I chose for the withholding of the additional tax of 4% at source by ING Belgium. What will happen now? 1. What is the additional tax on revenue income? The additional tax is a tax of 4% on the amount of interests and dividends exceeding a net total of 20,020 euros per taxpayer and per year. This threshold is consider per tax payer, and is defined per year. The additional tax on revenue incomes was instated by the Law of December 28 th 2011 (BG ) as from January 1 st 2012, but was renounced again by the Law of December 27 th 2012 (BG ) as from January 1 st In other words, the additional tax is only applicable on interest and dividends credited or payable in Its application is thus limited in time to the income year 2012 only. 2. Who is subject to the additional tax on revenue income? Only Belgian residents are liable to the additional tax, i.e. all individuals who file an individual income tax return in Belgium ( Déclaration à l Impôt des Personnes Physiques Aangifte in de Personenbelasting ). In general, they are individuals with a legal address in Belgium. In other words, non-residents, companies, non-profit associations, etc. are not concerned. 3. How will the additional tax on revenue income be levied? There are two ways the additional tax can be levied. The taxpayer has been able to choose himself between either one of those two systems: either through the individual income tax return. In such case, the Belgian Tax Authoriies will calculate the additional tax taking into account the revenue income stated by the taxpayer in his/her income tax return in 2013 (income year 2012) or the tax has been levied «at source». The tax payer has been able until December 31 st 2012 to request the bank to levy the additional tax of 4% at source, at the moment the interest of dividends were paid. This levying at source was only possible on the customers explicit request and for those 1

2 products on which the tax was applicable. ING Belgium has foreseen a retroactive correction for those revenue income that could not undergo the levying at source at the moment they were paid out. 4. Which revenue incomes are subject to the additional tax? Whether withheld at source or levied through the individual income tax return, the additional tax of 4% applies mainly to (Belgian or foreign source) interest and dividends liable to the Belgian withholding tax rate of 21%. The additional tax is never due on the following securities income: - interest from regulated savings accounts (whatever the total amount) - interest and dividends liable to withholding tax of 25% (e.g. - the interest from "Leterme government bonds" liable to withholding tax of 15% - tax-exempt reimbursement of life insurance contracts (Branches 21 and 23) - liquidation bonus liable to 10% Belgian withholding tax - the first tax-exempt tranche of 180 euros from dividends of cooperative companies - income from life annuities. On our website you will find a table summarising how the additional tax of 4% is applied to the products of ING Belgium SA/NV. 5. As from what amount will the additional tax be owed? The additional tax is due on the amount of interest and dividends exceeding a total net amount of 20,020 euros per taxpayer and per year. This threshold : - is calculated for the tax year 2012 (annual income tax return in 2013); - is calculated based on revenue incomes after deduction of any foreign withholding tax but before deduction of the Belgian withholding tax; In case a bank customer has opted for the withholding at source of the 4%, the additional tax has been withheld as of the first euro of interest and dividends liable to the said tax. Taxpayers can claim, via their income tax return, a reimbursement of the tax withheld at source on the amount of interest and dividends which did not exceed a total of 20,020 euros. The application of the additional tax has been renounced by the Law of December 27 th 2012 (BG ) as from January 1 st In other words, the additional tax is only applicable on interest and dividends credited or payable in Its application is thus limited in time to one income year only. 6. Which incomes are taken into account for the computation of the threshold of 20,020 euros? Principle: the revenues taken into account to calculate the 20,020 euro threshold are (Belgian or foreign source) interest and dividends received by a taxpayer. Exclusion: the following revenue incomes are always excluded from the computation of the 20,020 euros threshold: - the tax-exempt tranche of 1,830 euros per year of interests from regulated savings accounts; - the interest from "Leterme government bonds" liable to withholding tax of 15% - tax-exempt reimbursement of life insurance contracts (Branches 21 and 23) - liquidation boni liable to 10% Belgian withholding tax - the tax-exempt tranche of 180 euros from dividends of cooperative companies - income from life annuities. Prioritisation: the interests and dividends on which the 4% additional tax cannot be levied and which are not excluded from the calculation of the 20,020 euros threshold, are firstly computed to determine if the total net amount of the interests and dividends exceeds the said threshold. 2

3 It concerns the following revenue income: - (Belgian or foreign) interests and dividends subject to a 25% Belgian withholding tax rate; - the portion of the amount of interest from regulated savings accounts in excess of the taxexempt tranche of 1,830 euros (per taxpayer) per year in interest. On our website: you will find a table summarising the products of NG Belgium SA/NV for which the income does not come into consideration for the calculation of the 20,020 euro threshold. 7. Who is the person responsible for the application of the additional tax? The responsible for the application of the additional tax is the entity who has to withhold the 4% additional tax at source upon request of the beneficiary of the income. For example: - the company issuing Belgian registered securities (= securities indicated in the register of names of the issuer); - the Belgian insurance company for taxable income arising from Branch 21 and 23 life insurance contracts. - the Belgian bank which pays interest and dividends directly to the tax payer. For example, ING Belgium SA/NV is responsible for the application of the additional tax on : o foreign source interests and dividends cashed in Belgium through ING Belgium SA/NV ; o interests and dividends of Belgian securities deposited on a securities account; o interests and dividends on Belgian bearer securities (in physical form); o interests from cash deposits (current account, term deposit account, regulated savings account, etc.). 8. How is the communication of information to the Central Point of Contact (CPC) organised? The Law of December 28th 2011 imposed the sharing of information to a «Central Point of Contact» (CPC) by the person responsible for the application of the additional tax, in case the taxpayer would not request the additional tax to be levied at source, However, the Law of December 27th 2012 has abolished this principle, both for the income year 2012 as well as for the years to follow. In reality, both the system that had to send the information as well as the Central Point of Contact itself have never seen the light of day. As a consequence, the Belgian Tax Authoriies will calculate the additional tax taking into account the revenue income stated by the taxpayer in his/her income tax return in 2013 (income year 2012), under the condition that the 4% was not already levied at source, and assuming that the customer received over 20,020 euros of the relevant interest and dividends in Treatment of joint accounts (accounts with two or more joint holders) ING Belgium SA/NV has levied the additional tax of 4% at source on joined accounts, only in case ALL joint holders have expressed their wish to do so. 10. The obligation to declare revenue incomes in the annual tax return Principle. 3

4 The Law of December 28 th 2011 instated an obligation for the Belgian banks to communicate all revenue income (of Belgian and foreign origin, regardless of whether or not the Belgian withholding tax had been levied) unless the additional tax of 4% had been applied at source. This meant : - that the Belgian withholding tax would not longer be liberating - that the new additional tax of 4% would become liberating. However, the Law of December 27 th 2012 reinstated the liberating nature of the Belgian withholding tax as from January 1 st This means that for the income year 2012 only, the annual tax return will differ slightly, see below. Income year 2012 tax year On the condition that the tax payer declares on honour in his annual tax return that he/she did not receive any interest or dividends on which the 4% could still be levied, he will be excused from the obligation to declare certain revenue incomes. More specifically, it concerns revenue incomes on which a withholding tax of 25% or 21% respectively is applicable (not taking into account the additional tax of 4%), and interest on regulated savings accounts that exceed the exonerated tranche of 1,830 euros per year and per taxpayer and on which no withholding tax (15%) has been levied. In case the taxpayer did receive interest or dividends on which the additional tax of 4% could still be applied (remember that the 4% is only applicable on revenue incomes that exceed a thresheld of 20,020 euros), he/she will have to declare those revenue incomes in the annual tax return. Although, revenue incomes on which the 4% was applied will never have to be declared in the annual tax return. Income year 2013 (and following) tax year 2014 (and following). Revenue incomes (with the exception of some types) do not have to be declared in the annual tax return, on the condition that the withholding tax has been levied or in case a legal tax exoneration applies. Interest on regulated savings accounts exceeding the first exonerated tranche of 1,880 euros (amount applicable for 2013) per year and per taxpayer, and on which no withholding tax has been levied, do not have to be declared in the annual tax return. Important : In case of doubts, we advice you to contact an external counselor (accountant, tax expert, etc.) for the necessary support in filing your annual tax return. 11. How is interest applied to money deposited on regulated savings accounts (Green Savings Account, Orange Savings Account, ING Lion Deposit, ING Lion Premium, ING go to 18 Savings Account)? Application of the Belgian withholding tax. The withholding tax rate remains 15% on the amount of interests from a regulated savings account in excess of the first exonerated tranche per taxpayer (1,830 euros for the income year ,880 euros for the income year 2013). Obligation for the taxpayer to declare. The taxpayer must declare in his/her income tax return the total amount of interests exceeding the first tranche of 1,830 euros per year (1,830 euros for the income year ,880 euros for the income year 2013) and on which no withholding tax (15%) has been levied. Calculation of the 20,020 euros threshold. The amount of interest from regulated savings accounts in excess of the first tranche of 1,830 euros interests is taken into account first for the calculation of the 20,020 euros threshold. 4

5 Subject to the additional tax of 4%. The 4% additional tax is never due on interests from regulated savings accounts, neither on the first tranche of 1,830 euros nor on the interests above. 12. The 2012 interest statements mentioned that information was required to be shared with the Central Point of Contact... What s up with this obligation? The Programme Law of December 27th 2012 abolished the obligation for banks to share information with the Central Point of Contact, in contradiction with the initial Law. However, this act has only been published in the Belgian Gazette on December 21 st As a consequence, the texts in the statements could not be modified in time. This means that there will be no sharing of information by ING Belgium to the Central Point of Contact, contrary to what was mentioned in the statements. 13. At the end of last year, I chose for the withholding of the additional tax of 4% at source by ING Belgium. What will happen now? All these so-called «late requests» to have the 4% levied at source are currently being treated. Over the course of March 2013, a retroactive correction will take place on all events between January 1 st 2012 and December 31 st 2012, and on which the 4% can be applied. You will receive the corresponding statements accordingly. These incomes do not have to be declared in your annual tax return (see question 11). 5