Context

In the Belgian government’s action plan of March 2001 and in its report of October 9, 2001 about corporate tax reform, it was suggested that there was a need for clarification of the tax consequences for the employer and the employees of private PC (personal computers) purchase programs. The purpose of this tax clarification was to promote private PC purchase (programs) and thus the use of private personal computers in Belgium, the so-called “promotion of the E-society”.

The news

In addition to the E-society measures of the corporate tax reform project, which are not yet known, Belgian senators decided to propose a new law offering a legal framework for tax treatment of private PC investment.

The new tax law proposal, dated November 9, 2001, is composed of two main parts:

• For employees with a PC put at their disposal or given by their employer for private purposes (in addition to their computer at work), the taxable benefit in kind will be estimated on a lump sum basis at 25% of the total employer’s cost. The remaining 75% will be considered as a social benefit.
• For Belgian taxpayers who do not benefit from such employer private PC programs, a tax reduction will be possible if they purchase a private personal computer themselves. In this case, the tax reduction will be calculated according to the “special average tax rate” (with a minimum of 30% and a maximum of 40%) on the total purchase cost incurred by the Belgian taxpayer. The total purchase cost which can be taken into consideration is capped to a maximum amount of EUR 750 (VAT excluded) per taxable period. The maximum yearly tax reduction can be estimated at EUR 300.