Now that 2004 is drawing to a close, this Headline highlights some personal income tax related changes that will be effective from income year 2005. The HRS Headline team also seizes this opportunity to wish you all the best for 2005.

As of 1 January 2005 (income year 2005), childcare expenses are deductible from total net income for children aged up to less than 12 while to date it was restricted to children up to 3 years old. This deduction is subject to the following conditions:

- the taxpayer must have derived earned income; and
- the childcare expenses must have been paid to “Kind en Gezin – ONE” qualifying institutions, or;
kindergarten or primary schools, and;
- the reality of the expenses must be supported by appropriate documentation.

The deduction is capped to EUR 11,20 per day of care and per child.

Moreover, the Program Law has now been voted by the Chamber and the Senate setting up the new social security treatment of company cars as explained in our Headline of 9 December (1) and the new income tax treatment of the taxpayer’s own dwelling as explained in our Headline of 29 November (2).
The Program Law has however to be published in the Official Gazette to enter into force.

(1) http://news.hrservices.be?200412091753
(2) http://news.hrservices.be?200411291910