A sturdy signal of intentions, an inspiring invitation to business

Businessmen arriving at Brussels International Airport probably notice a large banner promoting “Wallonia¹⁰: 10 Good Reasons to invest in Wallonia”. The brochure that goes with this campaign outlines these reasons which range from productivity to hospitality. There might just be another good reason to invest, if it comes to local Minister Paul Furlan.

Mr. Furlan, together with the Union of Towns and Municipalities of Wallonia (UVCW), has developed a proposal for radical reform of property tax. This proposal aims to stimulate investment by indexing property value more accurately and postponing value adjustments to the moment of sale of the property. In addition the reform would allow the tax-payer to use one tax form for all tax payments.

Currently, property owners are taxed twice by property income, based on the net-average cadastral income (CI), as well as pre-tax property, which is a percentage of CI. Cadastral income is determined by a so called (local) cadaster, which in turn indexes the value by current inflation figures. In case a property owner invests in his/her property, the value of the property is adjusted within 30 days of completion of the investment, increasing CI and, ultimately, taxes to be paid.

UVCW proposes CI to be indexed by the value and developments of the property market, rather than on federal inflation. In addition, investments to the property should be adjusted at the moment of sale of the property, rather than in the 30-day period. This way, owners’ incentives to invest in their property might increase. For instance, transforming an industrial plant to a sustainable “green” production facility perhaps becomes a little more appealing.

AmCham Belgium’s position:
AmCham Belgium recommends in its Priorities for a Prosperous Belgium that Belgium’s governments, federal and regional, should take drastic measures to increase the attractiveness of Belgium’s business and investment climate.

As taxes can spur and guide economic development, AmCham Belgium supports the modernization of the property tax system to stimulate investment and as part of an overall objective of reducing corporate tax. The proposed reform will also help to reduce the administrative burden on business.

It is clear that the government of the Walloon Region is investing considerably in a better business climate. AmCham Belgium applauds this move.