Consolidated by the Royal Belgian Shipowners Association Program Law of 2/8/2002 (M.B. 29/08/2002 Ed. 2) art 115 art 127 Program Law of 27/12/2004 (M.B. 31/12/2004 Ed.2) art 321 art 331 TITLE V Finances CHAPTER I Ocean shipping Division I Profit from ocean shipping based on tonnage Art. 115 (modified by art. 321) 1. For the application of this chapter the definitions included below in this article shall apply. 2. 1 Profit from ocean shipping: a) the profit resulting from the operation of a sea-going vessel flying the flag of a Member State of the European Union, used for the transport of goods or persons as well as all activities directly connected with such operation: - on international maritime routes; - on routes from and to installations at sea designed for the exploration or operation of natural riches. The condition that such operations should take place under the flag of an EU Member State shall lapse, if the conditions mentioned under point 3.1, eight and ninth paragraph of communication C(2004) 43 of the European Commission Community guidelines on State aid to maritime transport are met; b) the profit resulting from the operation of a sea-going vessel under the Belgian flag for the transport of dredged materials on the high seas resulting from the exploration or operation of natural riches at sea, if the operations of such sea-going vessel involves carrying such dredged materials on the high seas for more than fifty percent of the vessel s operating time during the tax period; c) the profit resulting from the operation of a sea-going vessel under the Belgian flag if more than fifty percent of the said vessel s actual operations during the tax period involve the performance of towing operations on the high seas and if such towing operations can be considered as maritime transport;. 2 For the purposes of articles 116 to 120, the following shall constitute the operation of a sea-going vessel: a) the taxpayer is the owner, co-owner or bareboat charterer of a sea-going vessel that is managed to a considerable extent in Belgium and which he has not given out himself for bareboat chartering purposes; or b) the taxpayer mainly carries out the commercial management in Belgium of a seagoing vessel for an other taxpayer, provided the annual total of the net day-totals of the sea-going vessels for which he performs this commercial management does not exceed three times the annual total of the net day-tonnages he manages in the way referred to under a. In this respect sea-going vessels in co-ownership count for their full tonnage if this co-ownership is at least 5 per cent; or c) the taxpayer is the time-or voyage charterer of a sea-going vessel, provided the annual total of the net day-totals of the sea-going vessels he charters on a time or voyage basis does not exceed three times the annual total of the net day-tonnages he manages in the way referred to under a. In this respect sea-going vessels in coownership count for their full tonnage if this co-ownership is at least 5 per cent; 3 Division: a unit that is capable of performing an autonomous activity from a technical and organisational point of view and that is capable of working on its own resources.
In order to be considered a division for this Act it is required that each division can by considered to be a business department or branch of activity in the sense of Article 48 1 first paragraph, 2 of the Revenue Code of 1992 on the one hand and on the other hand as a branch of activity in the sense of Article 680 of the Companies Code and that: - this division keeps separate accounts; - this division - so far as its own activities are concerned presents itself to the outside world under the name of this division; - this division has a separate staff list for the staff that is employed in that division; - every cost is charged to a certain division under the provision that the costs that cannot be clearly charged to a certain division can be considered to be common; - between the divisions costs can only be applied (charged on) in the case of common costs. 4 Management of a sea-going vessel for the account of third parties: the taxpayer shall take care of the entire crew and technical management of a sea-going vessel operated for the account of third parties and he shall assume the full responsibility for the sea-going vessel s operation as well as take over from the owner all the duties and responsibilities arising from the international maritime safety and pollution prevention code (ISM Code) as approved by the International Maritime Organisation in their resolution A.741 (18) of 4 November 1993, made compulsory pursuant to the new chapter IX of the 1974 International Treaty for the protection of human life at sea (SOLAS 74) and later amendments internationally binding on Belgium; 3. When the taxpayer requesting the application of the provisions referred to in this chapter not only gains profits from maritime transport as described under article 115, 2, 1, but also obtains income from activities outside the scope of the abovementioned provisions, such taxpayer shall keep a separate set of accounts for each of the operations carried out. Art. 116 With regard to the domestic companies and Belgian establishments of foreign companies and at the request of the taxpayer, the profit that is taxable in Belgium resulting from ocean shipping is assessed on a flat-rate basis based on the tonnage of the sea-going vessels from which the profit is obtained, contrary to Articles 183, 185, 189 to 207, 233 first paragraph and 235 to 240 of the 1992 Income Tax Code. Art. 117 The request as mentioned in Article 116 is filed by the taxpayer with the tax administration which will take a decision on this subject within a period of three months counting from the date on which the request was received. This period can be extended by mutual agreement between the taxpayer and the tax administration. An appeal can be lodged against the decision of the administration concerning the request in accordance with Article 569, 32, 1385decies and 1385undecies of the Judicial Code. Art. 118 In case the request mentioned under Article 116 is granted the system regarding the assessment of the profit resulting from ocean shipping based on tonnage, according to this division, shall become operative starting from the taxable period that follows the one in which the request was filed till the end of the taxable period that is closed during the tenth calendar year following the one in the course of which the request was filed. At the end of the above period the system is tacitly extended for an identical period. The above system can be cancelled by the taxpayer at the latest three months before the expiry of the last taxable period of the above-mentioned period.
Art. 119 (modified by Art. 322) 1. The profit of the taxable period resulting from ocean shipping is assessed per vessel, per day and per 100 net tons on the basis of the amounts mentioned in the table below: - 1.00 EUR for the bracket up to 1,000 net tons; - 0.60 EUR for the bracket between 1,000 net tons and 10,000 net tons; - 0.40 EUR for the bracket between 10,000 net tons and 20,000 net tons; - 0.20 EUR for the bracket between 20,000 net tons and 40,000 net tons; - 0.05 EUR for the bracket over 40,000 net tons. The EUR 0.05 rate for the bracket over 40,000 net tons shall only apply: - either to sea-going vessels acquired as new vessels; - or to sea-going vessels less than five years old which have been registered under the flag of a non-eu Memberstate as of their delivery and during the entire period immediately preceding the taxable period during which taxable profits are assessed on a flat-rate basis for the first time in Belgium; - or to sea-going vessels at least five years old which have been registered under the flag of a non-eu Memberstate during the five years immediately preceding the taxable period during which taxable profits are assessed on a flat-rate basis for the first time in Belgium. For the implementation of this article the age of a vessel shall be determined on the basis of the delivery date as established by the Registrar of maritime mortgages or the competent registration authorities 2. Excess values or less values on sea-going vessels subjected to the ruling as described in this division are deemed to be included in the profit established on a flatrate basis. Art. 120 (modified by Art. 323) No earlier professional losses can be deducted from the profit fixed on the basis of Article 119. The possible part of the losses resulting from ocean shipping that was not charged which continues to exist at the time the profit resulting from ocean shipping is assessed for the first time on the basis of tonnage, can be deducted again after the expiry of the period for which the profit was thus assessed. Division II Special optional system of depreciations Art. 121(modified by Art. 324) 1. Except for the exceptions mentioned in the present section, the depreciations of new or second hand vessels are fixed in compliance with Articles 61 to 64 of the Income Tax Code of 1992. 2. The following depreciation percentages are allowed for new vessels exclusively used for the purposes of the operations described in article 115, 2, 1, for jointly owned parts of such new sea-going vessels and shares in such new vessels: - for the financial year of putting into service 20% - for each one of the two following financial years 15% - then, per financial year up to the complete writing off 10% 3. The depreciation shortages of the three first financial years, counting from the financial year during which the sea-going vessel was put into service are recovered in the course of the taxable periods that follow the one during which the shortage arose, even outside the normal depreciation period according to 2, under the provision that the overall annual depreciation annuity per vessel can under no circumstances exceed 20% of the purchase or investment value. 4. The vessels that are written off in accordance with the system referred to in the present article cannot benefit from the special optional system of retrogressive depreciations provided under Article 64 of the 1992 Income Tax Code.
5. Sea-going vessels not acquired as new, exclusively used for the purposes of the operations described in article 115, 2, 1, jointly owned parts of such new sea-going vessels and shares in such new vessels shall be entitled to the depreciation mentioned under 1 to 4, when such vessels enter for the first time into the ownership of a Belgian taxpayer. Those vessels which are not bought in new condition and which according to the first paragraph cannot benefit from the depreciation mentioned under 1 to 4 can be depreciated in a linear way during the normal depreciable life. For sea-going vessels not acquired as new, exclusively used for the purposes of the operations described in article 115, 2, 1, the depreciation mentioned under 1 to 4 shall also apply to the costs incurred for repair and fitting purposes at the purchase of such sea-going vessels. 6. The provisions of the present article are not applicable during the period during which the benefits resulting from ocean shipping are determined on the basis of tonnage. 7. In the event of alienation after the termination of the period during which the benefits coming from ocean shipping are determined on the basis of tonnage to calculate the excess value mentioned under Article 121, the net fiscal value is established on the basis of the normal fiscal depreciation rules, including for the period during which the benefits resulting from ocean shipping are determined on the basis of tonnage. Division III Exoneration of excess values on sea-going vessels Art. 122 1. Subject to reservation of the deviations mentioned in this division, the provisions mentioned under Article 190 of the 1992 Income Tax Code are applicable to the excess values realised on sea-going vessels by domestic companies and Belgian establishments of foreign companies that exclusively carry on business as described under Article 115. 2. 2. If a sum equal to the sales value is reinvested in the way and within the periods pointed out below, the excess values realised in case of alienation of sea-going vessels, are exonerated in so far the alienated sea-going vessels had the nature of fixed assets since more than 5 years before their alienation. 3. The reinvestment must be made in sea-going vessels, shares in joined ownership of seagoing vessels, in interests or in shares of a company - ship operator whose Registered Office is located within the European Union. 4. The reinvestment must be done at the latest at the time of termination of the professional activity and within a period of 5 years from the first day of the taxable period during which the excess value was realised or from the first day of the penultimate taxable period that preceded the realisation of the excess value. 5. In order to justify the tax system mentioned under 1 the taxpayer must enclose to his tax return for the Income Taxes for the assessment year during which the excessvalue was realised and the following years of assessment until the reinvestment in accordance with 2 to 4 is carried out, a statement the model of which is fixed by the Minister of Finances or his deputy. 6. If he reinvestment is not done in the way and within the periods of time fixed in 1 to 4, the obtained excess-value is considered as profit of the taxable period during which the reinvestment period has expired. 7. The investment considered as reinvestment must be maintained as an asset during at least five years but can possibly be replaced within three months after its alienation. If the investment considered as reinvestment was replaced in this way, the regulations of this article shall be applicable in the event of alienation of the acquired asset. 8. The provisions of this article are not applicable during the period during which the
profit from ocean shipping is assessed on the basis of tonnage. Division IV Investment allowance Art. 123 1. Notwithstanding Articles 88 and 201 of the 1992 Income Tax Code, domestic companies and Belgian establishments of foreign companies which exclusively carry out activities as described under Article 115 with regard to sea-going vessels obtained in new condition or second-hand sea-going vessels that are owned for the first time by a Belgian taxpayer, benefit from an investment allowance that is equal to 30% of the purchase price of these sea-going vessels. 2. The stipulations of this article are not applicable during the period during which the profit resulting from sea-going vessels is based upon tonnage. 3. If a taxable period does not provide any or insufficient profit in order to be able to carry out the investment allowance the exoneration that was not allowed for that taxable period is consequently transferred to the profit of the following taxable periods. 4. The part of the investment allowance that was possibly not deducted as it existed at the time the profit of ocean shipping was established for the first time on the basis of tonnage, can again be deducted after the termination of the period for which the profit was thus assessed. Division V Profit on the basis of tonnage resulting from the management of sea-going vessels for the account of third parties. Art. 124 (modified by Art. 325) 1. At the request of the taxpayer, the taxable profit resulting from the management of sea-going vessels for the account of third parties is assessed on a flat-rate basis based on the tonnage of the sea-going vessels that are being managed, notwithstanding Articles 183, 185, 189 to 207, 233 first paragraph and 235 to 240 of the 1992 Income Tax Code. 2. The request as mentioned in 1 is filed by the taxpayer with the tax administration which will take a decision on this subject within a period of three months counting from the date on which the request was received. This period can be extended by mutual agreement between the taxpayer and the tax administration. The administration can decide on the request by means of a decision against which an appeal can be lodged. 3. Should the request mentioned under 1 be granted, the system regarding the assessment of the profit resulting from ocean shipping based on tonnage, according to this article, shall become operative starting from the taxable period which follows the one during which the request was filed. The above system can be cancelled by the taxpayer at the latest three months before the expiry of the taxable period closed during the tenth calendar or a multiple thereof, following the one in the course of which the request was filed. 4. The profit of the taxable period resulting from the management of sea-going vessels for the account of third parties is assessed per vessel, per day and per 100 net tons on the basis of the amounts mentioned in the table below: - 1.00 EUR for the bracket up to 1,000 net tons; - 0.60 EUR for the bracket between 1,000 net tons and 10,000 net tons; - 0.40 EUR for the bracket between 10,000 net tons and 20,000 net tons; - 0.20 EUR for the bracket between 20,000 net tons and 40,000 net tons; - 0.05 EUR for the bracket over 40,000 net tons.
The EUR 0.05 rate for the bracket over 40,000 net tons shall only apply to the management of sea-going vessels for the account of third parties if: - the shipowner has acquired the sea-going vessels concerned as new; - or to sea-going vessels less than five years old which have been registered under the flag of a non-eu Memberstate as of their delivery and during the entire period immediately preceding the taxable period during which taxable profits are assessed on a flat-rate basis for the first time in Belgium; - or to sea-going vessels at least five years old which have been registered under the flag of a non-eu Memberstate during the five years immediately preceding the taxable period during which taxable profits are assessed on a flat-rate basis for the first time in Belgium 5. The possible part of the losses that was not charged resulting from management of sea-going vessels for the account of third parties as it exists at the time the profit is assessed for the first time on the basis of tonnage, can again be deducted after the termination of the period for which the profit was thus assessed. 6. The system as stipulated in this article is reserved for taxpayers that handle the management of sea-going vessels for the account of third parties for which at least 75% of the number of sea-going vessels managed by third parties must be registered in the Belgian Register of Shipping. The companies that wish to use the system mentioned under this article must have the management of sea-going vessels as their exclusive activity.