Now that 2006 is drawing to a close, this Headline highlights some personal income tax related changes that will become effective from income year 2007 onwards. The HRS Headline team also seizes this opportunity to wish you all the best for 2007.

New wage withholding tax scale as from 1 January 2007

The Royal Decree amending the wage withholding tax section of the Royal Decree implementing the Income Tax Code was published in today’s official gazette(*). In addition to yearly indexation, the Flemish lump-sum reduction (see our Headline of 27 September) has been introduced in wage withholding tax legislation. A (monthly) withholding tax reduction of EUR 10,40 is granted to taxpayers who reside in the Flemish Region, provided that their yearly normal gross earned income amounts to at least EUR 6.925,00 and does not exceed EUR 24.530,00 in the case of employees (compared to a minimum of EUR 5.790,00 and a maximum of EUR 23.425,00 in the case of executive directors (“bedrijfsleiders/dirigeants d’entreprise”)).

The new wage withholding tax scale applies to income paid or granted as from 1 January 2007.

For more ease in computing the wage withholding taxes, the tax authorities have also issued their “Key formula for computing wage withholding taxes on remuneration and pensions”. The document is available on their web site:
FR: http://news.hrservices.be?lk200612221
NL: http://news.hrservices.be?lk200612222

Programme Act

The new Programme Act will introduce several income tax changes. For example, the exemption from remitting (part of) wage withholding tax for employers who are paying or granting fees to researchers will be broadened as from 1 January 2007. The Programme Act, however, still has to be published in the official gazette to enter into force.

(*)http://news.hrservices.be?lk200612223