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News

25.05.2016

Group insurance for your employees' building projects

Since 1/4/2016, the variable interest rate charged on advances has decreased from 2.75% to 2.35%. This offers additional opportunities for employees of yours with housing projects they wish to carry out.

Whether to build, buy or renovate, AG Insurance has several customized solutions for your employees.

In fact, besides advances, reinstatement (endowment mortgage) loans, pledge loans and using group life insurance as an alternative to outstanding balance insurance are attractive packages for your younger employees, whose pension plan reserves are still limited in size.

Advance

The principle is simple: through his group insurance, the employee saves up a supplementary pension capital that will be paid out to him on retirement.
The advance (1) allows him to use the already constituted savings in order to:

  • finance the purchase, construction, improvement, repair or conversion of a property
    that is located in the European Economic Area and producing taxable income.
  • repay a mortgage loan previously granted and intended for any one of the above purposes.

Reinstatement (endowment mortgage) loan

Your employee takes out a mortgage loan from a financial institution and pays only the interest.

The mortgage capital is repaid at the end of the contract via the pension capital built up at that time through the group insurance.

The group insurance is linked to the mortgage loan and is used to reinstate the capital borrowed.

Pledge loan

The group insurance is pledged to the financial institution that extends credit to your employee, and serves to guarantee the repayment of the credit.

The pledge is an interesting option because the financial institution has an additional warranty.
In this way your employee enjoys an increased borrowing capacity where the value of the property is insufficient to secure the loan.

Finally, the pledge can be a valuable tool for negotiating a more favourable rate. While it does not generate any tax benefit, this solution is free of charges.

An alternative to outstanding balance insurance

When the death benefit of a group insurance contract is used as an alternative solution to outstanding balance insurance, this amount will be paid to the bank in the event of death in order to reimburse the outstanding mortgage debt.
  
(1) The employer must expressly provide in the group insurance regulations for the possibility of advances on benefits. 

(Source: EB Minutes AG Employee Benefits)
News

30.10.2018

Third quarter 2018 results BNP Paribas

WB_News_Results_BNP_Q3_2018_enJean-Laurent Bonnafé, Chief Executive Officer BNP Paribas: “BNP Paribas delivered this quarter a good level of income, at 2.1 billion euros. The Group’s business continues to grow in a contrasted context of economic growth in Europe. Despite a still unfavourable market context in Europe, the revenues of the operating divisions increase slightly, driven by the specialised businesses.”

 

For more information, click here.
News

17.10.2018

The FPS Economy tells you all about the Brexit

The impact of the Brexit on the business of companies is still uncertain. That is why the FPS Economy introduces an information portal, including a ‘Brexit Impact Scan’. This scan helps to map out the possible consequences of the Brexit on the activities of an enterprise.

News

11.10.2018

Tax pre-payments even more important as of 2018

Bear in mind that companies that don’t pay enough of their tax in advance now face larger surcharges.

As of 2018 (for the tax year 2019), you will have to pay a higher surcharge if your corporation tax pre-payments aren’t large enough. Companies that didn’t previously pay much attention to pre-payments during the course of the tax year are strongly advised to do so in future. Nothing has changed for self-employed people subject to personal taxation.

From 2018 onwards, it’s particularly important to make your tax pre-payments

The surcharges imposed in the event of insufficient pre-payments have been calculated for years based on ECB interest rates. But this reference rate has been less than 1% in recent years, obliging the government to set higher surcharges by Royal Decree.

It was decided at the end of 2016 that a permanent solution was needed, and so new legislation was passed, which comes into effect as of the 2018 tax year (i.e. for all financial years commencing 1 January 2017).

Since then, the reference rate has been set at a minimum of 1%. Under the ‘Summer Agreement’ approved at the end of 2017, the rate was further increased to 3% in the case of corporation tax. The reference rates are multiplied by 2.25 to arrive at the final surcharge applied to the amount of tax payable. In specific terms, this means that as of the 2019 tax year (financial years commencing 1 January 2018), the surcharge imposed on non-payment or underpayment of advance corporation tax has tripled from 2.25% to 6.75% of the tax liability. The same applies for subsequent years, when the surcharge will be at least 6.75%.

The ‘Summer Agreement’ also scraps the so-called ‘de minimis’ rule in relation to corporation tax, which means the surcharge will also apply if it is less than 0.50% of the tax liability or less than EUR 50.

The government aims in this way to encourage more companies to make tax pre-payments (in good time) in periods of low interest rates.

The benefits of pre-payments

Companies are not obliged to make pre-payments. The advantage of doing so is that the surcharge described above can be reduced or avoided. Businesses do not, however, qualify for the kind of tax benefit available to private individuals, which means there is nothing to be gained by making an unnecessarily high pre-payment.

A cut-off date for the pre-payments is set for each quarter throughout the financial year. The earlier in the financial year that you make a pre-payment, the more any eventual surcharge is reduced. Due to the increase in the reference interest rate, these reductions have also been tripled.

In specific terms, a company whose financial year coincides with the calendar year and which...

  • made a pre-payment before 10/04/2018 (first quarter), receives a 9% reduction
  • made a pre-payment before 10/07/2018 (second quarter), receives a 7.5% reduction
  • made a pre-payment before 10/10/2018 (third quarter), receives a 6% reduction
  • makes a pre-payment before 20/12/2018 (fourth quarter), receives a 4.5% reduction

... calculated in each case on the amount of the pre-payment for that quarter.

The cut-off dates for companies whose financial year does not coincide with the calendar year fall on the tenth day of the fourth, seventh and tenth month and on the twentieth day of the final month of the financial year. Specific rules are provided for companies with a financial year of more or less than twelve months.

The new rules mean that a surcharge for the tax year 2019 can be avoided if 75% of the tax liability is paid during the first quarter or 90% of the tax liability is paid during the second quarter. If pre-payments are only made in the third and/or fourth quarter, more than 100% of the tax liability must be paid to avoid an increase.

For self-employed people subject to personal taxation (such as a manager or company director), similar rules apply as for companies, although the rates have not been increased in this case (surcharge of 2.25%, reductions of 3%, 2.5%, 2% or 1.5%). The ‘de minimis’ rule also continues to apply and the calculation of the potential surcharge only differs by a few percentage points. What’s more, an additional tax benefit or rebate is granted in the case of personal taxation on pre-payments that exceed the amount required to avoid a tax surcharge. This benefit is calculated quarterly at half the percentages set out above.

How much tax is it best to pre-pay?

  • You are free to choose the amount. But you should bear in mind that if you wait until the third or fourth quarter, you will have to pay over 100% of the tax liability in advance.
  • Check your income from the previous financial year and take account of any changes in your business activities, investments or turnover. Be sure to consult your accountant or visit the official government website (FR/NL).
  • Try as much as possible – especially in the case of corporation tax – to limit your pre-payments to the amount needed to avoid the surcharge. If you make an excessively high pre-payment, you’re effectively providing the state with an interest-free loan.
  • If you realise towards the end of the financial year that you have made more profit than anticipated, you can still make an extra pre-payment up to the twentieth day of the final month of the financial year.
  • Also consider the special credit formula offered by the bank to cover your tax pre-payments. The interest on loans of this kind is tax-deductible as a business expense, although the main reason for choosing a solution like this is the improved cashflow management it provides.

More info L’Echo 14/08/2018 or De Tijd 14/08/2018)

News

04.09.2018

First Half Year Results 2018 BNP Paribas Fortis

Max Jadot, CEO BNP Paribas Fortis NV: "With a net result of EUR 934 million, BNP Paribas Fortis achieved a good performance in first half 2018. Against a background of an increasingly volatile international environment and despite the pressure of the persistently low interest rates, we succeeded in maintaining our revenues and pursued our role to finance both individual and corporate customers."

Read the press release

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