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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

12.02.2019

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 now. 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...

  • makes a pre-payment before 10/04/2019 (first quarter), receives a 9% reduction
  • makes a pre-payment before 10/07/2019 (second quarter), receives a 7.5% reduction
  • makes a pre-payment before 10/10/2019 (third quarter), receives a 6% reduction
  • makes a pre-payment before 20/12/2019 (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 2020 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.

Which account should payments be made to?

  • For companies that do not close their balance sheet on 31/12: the advance payments for the ongoing 2019 tax period (2018 revenues) must be made to the existing account number: BE20 6792 0023 3056 (BIC: PCHQ BEBB).
  • For companies that close their balance sheet on 31/12, the advance payments from the 1st quarter of the 2020 tax period (2019 revenues) must be made to a new account number:
    BE61 6792 0022 9117.

    For payments to the new account number, it is necessary to use a structured message based on the company number (CBE – the Crossroads Bank for Enterprises).
News

12.02.2019

BNP Paribas Group, results 2018: the business was up

In the context of economic growth in Europe, the business of BNP Paribas was up in 2018 with higher outstanding loans. The revenue evolution was however penalized by the still low interest rate environment and an unfavorable financial market context with particularly challenging conditions at the end of the year.

WB_News_BNP_Results_en


Chief Executive Officer of BNP Paribas, Jean-Laurent Bonnafé:

“Thanks to its diversified and integrated model, the Group delivered in 2018 7.5 billion euros in net income. BNP Paribas’ digital transformation plan is being successfully implemented, illustrated by the roll out of numerous new customer experiences. The Group is actively executing its ambitious policy of engagement in society. The Group is committed to its 2020 ambition and implements further savings to significantly improve operating efficiency in all the operating divisions as early as 2019.


WB_News_Results_BNP_full_year_2018_en


Link to the press release


News

08.02.2019

Apple Pay: for your professional expenses too

Does your company provide its employees with debit and credit cards? If they have an Apple device, they can now activate Apple Pay, the contactless payment service, for all their professional expenses too.

This solution allows them to use these devices to pay online or in shops, via all terminals displaying the Apple Pay logo or the contactless payment icon. To do so, they just need to add their Mastercard or Visa credit card and/or BNP Paribas Fortis debit card to their Apple Wallet with SMS authentication.

To find out more, visit our dedicated page (FRNL).

If you have any questions at all, please feel free to contact your relationship manager.

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News

22.01.2019

Solvay links the cost of credit to a reduction in greenhouse gases

Solvay has agreed new terms in an existing €2 billion revolving credit facility, linking the cost of credit to a reduction in greenhouse gases. Solvay concluded this positive incentive agreement with its syndicate of nine banks. BNP Paribas Fortis is acting as Sustainability Coordinator and agent bank to Solvay’s long-term banking partners.

Solvay announced in September 2018 a commitment to cut greenhouse gases from its own operations by 1 million tonnes by 2025 relative to 2017 levels. The Group intends to achieve this reduction by further improving energy efficiency, energy mix and by investing in clean technologies. “We seek to integrate sustainability into all key aspects of our business, including financing. Associating Solvay's ambitious greenhouse gas emissions target to the cost of credit is a logical step. The successful teaming up with our banks shows that the way towards more sustainability is a collective effort," said Jean-Pierre Clamadieu, CEO of Solvay.

I am proud that Solvay has mandated BNP Paribas Fortis to introduce a Positive Incentive Loan mechanism that supports Solvay’s ambitions in reducing greenhouse gas emissions. This innovative solution is a clear example of how we and the syndicated banks we represent aim to serve our clients in terms of value creation. Collaboration between banks and clients is key in driving the economy forward to a more sustainable future,” said Max Jadot, CEO of BNP Paribas Fortis.

Read the full Press Release

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