Belgian Government Debating Details of New Tax System for Diamond Industry

Economy
21/04/2015 16:52

The Belgian Federal Government recently agreed to introduce a simplified tax system for the Belgian diamond industry. Commonly known as the “Carat Tax”, diamantaires will henceforth be taxed on a lump-sum basis of turnover rather than actual profits, which are highly difficult to determine. De Standard newspaper reports that government sources have claimed that the rate is to be fixed at 0.55%. Discussions are ongoing.

Proponents of the new system argue that it will lead to an appropriate budgetary contribution by the industry, with diamantaires paying up to three times more in taxes, and it will provide greater stability and legal certainty. Opponents claim that it is a preferential fiscal concession that will not pass the test of the European Commission’s restrictions on State aid.