The Trump Administration’s tax reform plan promises to transform the global business and investment environment. This is an opportunity – and an extra reason – for Belgium to step up its game and achieve its own corporate tax reduction.
Last week, US Treasury Secretary Steven Mnuchin outlined a tax reform plan which could be a game-changer for international US companies and global investment flows. The main thrust of the proposal – which will form the basis of negotiations with Congress – is to reduce the US corporate income tax rate from 35% to 15% and provide a one-off tax break for repatriated US corporate profits earned overseas. This reform would make the US one of the most competitive OECD countries in terms of corporate taxation.
The US’s plan to slash its corporate income tax rate is not an isolated case. Indeed, we see many countries adapting their tax policies in order to attract and retain international companies, as global political and economic shifts force companies to re-evaluate their corporate footprints.
Belgium’s own corporate tax reform, however, seems to be at a complete standstill. Political negotiations on the reform have reached an impasse and there is growing uncertainty about whether the proposal will be adopted during the current government mandate. Businesses in Belgium are already among the highest taxed in the OECD, and international companies operating here are increasingly worried about the lack of progress.
To remedy this situation, AmCham Belgium strongly recommends to:
- Move forward on reducing corporate taxation to 20% or below by 2020
- Maintain the Notional Interest Deduction
- Prioritize predictable and stable legislation
Belgium can be put on the map of foreign investors, but only if it takes urgent action to become more competitive. Tax reform is an investment in the future, without which we risk losing foreign and local businesses and jeopardizing our prosperity. AmCham Belgium is ready to work with all levels of government to help Belgium stay in the game with its own corporate tax reform.