IV. COMPLEMENTARY PERSONAL TAX
(Article 37 and following of co-ordinated laws; Articles 6 and 7 of the Law of July 23rd, 1932; Articles 1 to 6 of Royal Decree of January 13th, 1933, in execution of Article 1 of the Law of December 30th, 1932.)
Until 1930, the income-tax system included, in addition to the schedular or impersonal taxes, a personal tax called complementary income-tax or super-tax, payable by the taxpayer in respect of his total income — i.e., the total income directly or indirectly subject to schedular taxes and income exempt from these taxes.
The Law of July 13th, 1930,1 modified by Articles 6 and 7 of the Law of July 23rd, 1932, and by Articles 1 to 6 of the Royal Decree of January 13th, 1933, issued in execution of the Law of December 30th, 1932, replaced the super-tax on total actual income by the complementary personal tax, based in principle on a number of expenditure indices common to the majority of taxpayers and indicating the apparent station in life — rental value of house and furniture, number of servants, horses, motor-cars. Nevertheless, when the total amount received by the taxpayer as income from real property, capital investments, mortgage debts and the exercise of a profession exceeds 100,000 francs, the tax is assessed on the total of the income from these sources, provided such total exceeds the basic amount of taxation as determined by the application of the indices.
note1. TAXPAYERS
Any individual domiciled or resident in Belgium during the first three months of the year is liable to complementary personal tax if the taxable basis exceeds a legal minimum, varying according to communes and due regard being paid to family circumstances. The tax is payable by anyone who, as owner or tenant, occupies houses or reserves houses for partial or total occupation by his family or servants (seaside villa, country house, shooting-box, etc.).
The tax is not payable by companies, partnerships or legal entities.
2. BASIS OF TAXATION
The complementary personal tax is assessed on the following bases:
Houses. — By houses are meant premises or parts thereof for the private use of taxpayers, including commons, parks or gardens belonging to them, but not including buildings used exclusively for the exercise of some profession, trade or industry. The tax is payable by any person who occupies houses or reserves them for occupation, even partially or temporarily, by his family or servants.
The rental value of these houses is the gross income on which the cadastral income is based, or the actual or presumed income when occupation is limited to part of a house not included separately in the cadastral survey.
Furniture. — The rental value of furniture is fixed at 5 per cent of its capital value as determined by the Law of August 28th, 1921,2 establishing a tax on furniture.
noteWhen houses are let furnished, account must be taken of rental value both of the house and of the furniture.
Domestic Servants. — The expenditure index representing the services of domestics and other persons is fixed at:
noteHorses. — The index figure in respect of horses used for riding and driving4 is fixed at 12,000 francs per horse.
noteCarriages, Motor-cars, Canoes and Steamboats, Motor-boats and Sailing Vessels, Aircraft. — The expenditure index applying to these means of transport varies from 2,000 to 50,000 francs, according to rules to be fixed by Royal Decree.5
noteDivision of Indices. — Since the object of the complementary personal tax is that each taxpayer shall pay according to his standard of living, measures have had to be taken to prevent persons dividing their indices with one another and thus unduly benefiting by a reduction of or even exemption from tax. The law therefore lays down that persons living together so as to form one household may not divide their indices. The tax is assessed on all the taxable elements and is payable by the head of the family or the person who occupies the position of head of the household.
Division, however, is allowed between persons who constitute associations having civil personality and not formed for purposes of gain.
3. ASSESSMENT OF TAX
(a) COMPUTATION OF TAXABLE BASIS AND ABATEMENTS
Expenditure indices are computed, having regard to the normal situation of the taxpayer on January 1st of the fiscal year.
In the case of persons who become liable to the tax after this date, account is taken of the indices existing on March 31st of the fiscal year.
The indices once fixed, the taxable basis for complementary personal tax is determined by applying the following coefficients to the total expenditure indices:
2 if the total is less than 25,000 francs;
2.2 if the total is from 25,000 to 50,000 francs;
2.4 if the total is from 50,000 to 75,000 francs;
2.6 if the total is from 75,000 to 100,000 francs;
2.8 if the total is from 100,000 to 125,000 francs;
3 if the total is 125,000 francs or more.
Nevertheless, when the total amount received by the taxpayer as income from real property, capital investments,1 mortgage debts and professional activities exceeds 100,000 francs, the tax is assessed on the total of the income from these sources, provided such total exceeds the basic amount of taxation as determined by the application of the indices.
noteFor the purposes of carrying out this provision, the income from real property situated in Belgium must correspond to the cadastral income attributed, for the period to which the complementary personal tax refers, to the property which the taxpayer holds on January 1st of the year to which the assessment relates; as regards income from other sources, the term “income” means that which has been realised during the previous year.
Exempted Minimum.2 — The tax is not due when the taxable basis thus obtained does not exceed:
15,000 francs in communes with fewer than 5,000 inhabitants;
20,000 francs in communes from 5,000 to 30,000 inhabitants;
25,000 francs in communes with 30,000 inhabitants or more.
noteIn families with three or more children, this minimum is raised per child dependent upon the taxpayer on January 1st of the fiscal year as follows:
2,000 francs in communes with fewer than 5,000 inhabitants;
2,400 francs in communes from 5,000 to 30,000 inhabitants;
3,000 francs in communes with 30,000 inhabitants or more.
Further, the number of out-door workers (ouvriers-domestiques) or maids is reduced by one or by two units according as there are, on January 1st of the fiscal year, at least three or at least seven children dependent upon the taxpayer.
As regards seriously disabled ex-servicemen entitled to benefit by the Law of May 13th, 1929, the minima and increases fixed above are further raised up to the amount of the invalidity pension of the person concerned.
(b) COMPUTATION OF TAX AND DEDUCTIONS
If the minima given above are exceeded, tax is computed on the whole taxable basis.
If the basis does not amount to 25,000 francs, the tax is 1 per cent; above 25,000 francs, the rate gradually increases for every 25,000 francs or fraction of such amount by 1/2 per cent up to 125,000 francs, by 1 per cent from 125,000 up to 200,000 francs and by 2 per cent from 200,000 francs up to a maximum of 20 per cent for the part of the taxable basis in excess of 350,000 francs.1
noteThe complementary tax payable by the head of a family including three children is reduced by 7 per cent for each of these children dependent upon the taxpayer on January 1st of the fiscal year.2
noteThe provinces and communes are not allowed to levy “additional centimes” tax on the complementary personal tax or any similar taxes on the basis or amount of that tax.
4. COLLECTION OF TAX
The tax is collected on the basis of an annual declaration by the taxpayer and is payable according to the tax list within two months3 of receipt of the assessment notice.
noteAs with schedular taxes on income, persons liable to complementary personal tax may appeal against their assessment to the Director of Taxes (see note 1 on page 51).