N-VA proposes doubling withholding tax on savings account (subject to higher exemption)

A lot of advice is now being requested, but Vooruit, CD&V and MR, who are negotiating a new federal government together with N-VA, would rather incorporate the exercise into a broad tax reform. According to N-VA, this would involve a reduction in taxes for most people, because the exempt bracket will be significantly increased at the same time.

There is a withholding tax on savings accounts in our country 15 percent from the first installment of 1,020 euros interest on savings accounts. According to the European Commission, the fact that only savings accounts benefit from this favorable tax rate with an exemption, and investments in funds, bonds or shares do not, is contrary to the single European capital market. A European infringement procedure was followed by a conviction by the European Court of Justice. Because in practice accounts at foreign savings banks cannot benefit from the exemption, our country suffered a second conviction.

N-VA and Open VLD want a solution to this unequal treatment and have each submitted separate bills to that end. The liberal proposal implements a unified one exempt bracket of 1,800 euros for the income from savings accounts and investments, without being affected by the 15 percent withholding tax on savings interest. In the N-VA proposal the exempt bracket 2,000 eurosbut all income thereafter is taxed at a rate of 30 percent. This means a doubling of the interest on savings accounts.

“Not in favor of tax increases”

According to Charlotte Verkeyn, who submitted the N-VA proposal, her group mainly takes into account the budgetary impact of the proposal. “There is a larger exempt bracket, but then we also have to look at what is needed to keep it budget neutral,” she said. Verkeyn emphasized at the same time that she is “not married to the proposal”. “I am personally not in favor of tax increases. If there are other solutions, that is possible.”

According to the party, the N-VA proposal will in any case imply a tax reduction for most savers, because with an exempt bracket of 2,000 euros, 200,000 euros must already be in the account before the 30 percent rate is applied. Moreover, this exemption applies per person, so for a couple it amounts to 400,000 euros, it sounds.

“Global Reformation”

In any case, MR, Les Engagés, Vooruit and CD&V, perhaps the future coalition partners of N-VA, want to encapsulate the entire exercise in a broader tax reform, they made it clear in Commission on Tuesday. Jean-Luc Crucke spoke of the need for a “global reform”. “We are not going to do this without global reflection,” said MR faction leader Benoît Piedboeuf. Koen Van den Heuvel (CD&V) “agreed in principle” with the proposals, “but the ambition should be to tackle this globally with an ambitious tax reform, and not to tackle the problems piece by piece.” “Let’s hope that in a few weeks we can talk about a global tax reform here, because we need it to achieve a tax shift,” said Jan Bertels (Vooruit).

In any case, the intentions of the N-VA are clear for Open VLD member Vincent Van Quickenborne. “It is a conscious choice by you and your party to opt for a tax increase on savers. (…) Arizona (the possible future federal government, ed.) has not started yet and you are already busy.”

Lode Vereeck (Vlaams Belang) thinks the tax simplification in the proposal is a good thing, but also questions the 30 percent rate. He advocated a uniform rate of 15 percent on all savings and investment producers. Kemal Bilmez (PVDA) doubted whether the exercise in the N-VA proposal would be budget neutral, as did Meyrem Almaci (Green), who at the same time argued for a “deeper debate”, including on the possible consequences for small savings banks .

The Parliamentary Finance Committee is now first requesting ten pieces of advice from, among others, the Court of Audit, the small savings banks, Test-Aankoop and the FPS Finance. In any case, they won’t be available until early next year.