Dear Colleague,

This week:

• Tax-news Headlines
• Belgium
• Belize
• Updated - Offshore Service Provider's Directory
• 25% Discount: LowtaxLibrary

I hope you find this update useful. Please remember that you can customise your mailing preferences by visiting your own profile page to choose from 29 offshore tax and law subjects in order to receive just the information you want. You can also unsubscribe completely by following the instructions at the bottom of this page.

Kind regards,

Kate James

Onshore

Belgium

Belgium has a corporate income tax rate of 33.99% (including a 3% so-called 'crisis surcharge') and has never been considered a financial center. However in order to attract the headquarters of foreign multinational companies Belgium accords favorable tax treatment to entities known as "co-ordination centers". It also offers a low-tax regime to expatriate employees with specialist skills, and has a relatively benign holding company taxation regime.

On 1st January 2006 Belgium introduced a 'notional interest deduction', taking effect in tax year 2007, which allows all companies subject to Belgian corporate tax (including Belgian branches of foreign companies) to deduct from their taxable income an amount equal to the interest they would have paid on their capital in the case of long-term debt financing.

At the same time, the 0.5% registration duty on capital contributions will be abolished.

The calculation of the tax deduction will begin with the ‘equity capital’ as stated in the company’s opening balance sheet of the taxable period. Based on Belgian accounting law, ‘equity capital’ includes capital, share premiums, revaluation gains, reserves, carry-forward of profits or losses and capital investment subsidies. The notional interest rate will be set each year and will follow the average annual 10-year government bond rate. Currently, that rate is 3.442 %. The law sets a maximum deviation of 1% from one year to the next and a maximum percentage of 6.5%. The government may change these percentages by Royal Decree.

The notional interest deduction does not discriminate between companies and complies fully with existing Belgian and EU law. Discussions with EU authorities have taken place and the measure is compatible with EU State Aid rules and the Code of Conduct.

Learn more in our full Belgium Knowledgebase.

Directory

For Visitors

Our aim is to offer you the ability to locate a service provider specialising in the field of your choice, in the jurisdiction of your choice, with just a few clicks. We only list confirmed entries to reduce the number of dead-ends and strictly enforce categorisation criteria to ensure that you find exactly the service you are after. As of September 2007 we have begun to implement a new, expanded format to make the directory even more user friendly and comprehensive.

Click here for the new directory home page.

For Service Providers

The Lowtax Offshore Service Provider's Directory offers firms the ability to highlight their services to one of the web's largest specialised tax, legal and offshore audiences. Our visitors include large numbers of corporates and HNWIs. Standard entry in the directory is free as long as your details are kept up to date. Premium entry options are available. Please contact diectory@lowtax.net for further details.

Click here for the new directory home page.

Offshore

Belize

Grenada Attends 20th COTA General Assembly, by Amanda Banks, for LawAndTax-News.com 31/07/2008

Caribbean Tax Administrators Meet In Belize, by Amanda Banks, Tax-News.com, London 23/07/2008

Taiwanese Ambassador Presents First Instalment Of Grant To PM Of Belize, by Mary Swire, for LawAndTax-News.com, Hong Kong 11/07/2008

Belize is centrally located in the Americas

Belize is an independent country within the Commonwealth bordered by Mexico, the Caribbean and Guatemala to the east and south. It is 24,000 sq km in size, with a population of 300,000. The country is, or was, heavily forested. The climate is nearly tropical, and there can be hurricanes. The extremely mixed population is racially harmonious. English is the official language and the main religion is Christianity. The currency is the Belizean dollar, fixed at BZ$2 = US$1.

Sugar and bananas represent a difficulty for the centrist Government . . .

In Belize's bi-cameral Westminster-style government, the lower house was most recently elected in 2003 and the government is tackling economic problems caused reduced access to privileged markets for sugar and bananas by encouraging foreign investment in manufacturing and the development of mass tourism. The country's structural deficit can only be financed by overseas borrowing, but the Government hopes for debt relief for existing loans. GDP growth was 3.1% in 2005.

In October 2004, the government began implementing a significant tightening of fiscal policy. This has resulted in a reduction in the country’s overall deficit to 3.1% in fiscal year 2005/2006.

By August 2006, former Prime Minister Said Musa announced that the servicing of the country's debt, which accounts for 90% of its GDP, was "no longer a viable option" on existing terms, leading to a rearrangement of Belize’s US$900 million external debt stock.

. . . and foreign pressure may hold back offshore development.

Internal Belizean taxes are moderate, with a small turnover-based tax in addition to 25% corporation tax. Employees pay up to 45% tax on income plus social contributions. There is a variety of offshore schemes, including IBC legislation, a modern trusts law, and an array of free zones and investment incentive schemes. Belize offered 'economic citizenship' until the program was cancelled in 2002, and there is a retired persons regime. International pressure on Belize to moderate its offshore regime in exchange for debt relief seemed to have slackened in 2003.

The business environment is quite good, but e-commerce lags.

Telecommunications are state-of-the-art, but too expensive because of the telecommunications monopoly which is holding back development. Recent moves to open up an e-commerce free zone may have come too late for Belize to catch up with more advanced jurisdictions. Air and sea communications are both good, and it may be that Belize's immediate offshore future lies more in expanding its effective and popular free zones than in other directions.

Learn more in our full Belize Knowledgebase.