The European Commission issued a positive opinion on the request filed by the Belgian authorities in order to introduce a new system of taxation for companies trading in rough and polished diamonds in this country, based on a lump sum of profits rather than actual profits, are now used.
The European Commission has spent about one year out to consider the proposed tax reform, and make sure it is not a disguised form of state aid - the conclusion which the Commission issued July 29, 2016. In a press release issued the same day, it was said that "the provisions of the Belgian tax law for companies that apply to the sector of wholesale trade in diamonds and diamonds, in line with EU rules on state aid. These provisions do not provide benefits to individual companies and, therefore, are not linked to state aid in the understanding of EU rules. "
Belgian authorities in May 2015 notified the European Commission that the plan to introduce a special regime of taxation of income diamanters to resolve specific difficulties in the application of the general tax regime in the sector. And now the European Commission carried out the evaluation showed that the changes made by the Belgian authorities to minimize the possibility of providing a selective advantage to certain companies in the wholesale diamond trade sector.
Explaining the difficulties faced by both the Belgian tax authorities and companies selling diamonds and diamonds in the overall Belgian corporate tax system, the European Commission notes that the taxpayer's taxable income in Belgium, depends primarily from profit as reported in its accounts , whereas for wholesale traders working with diamonds and diamonds, much profits depend on the value of stocks of stones on their accounts and, as the evaluation of these stones requires considerable knowledge s, the Belgian tax administration is difficult to assess and adjust the value of inventories of diamonds in the course of tax audits.
"In addition, diamonds and diamonds at the wholesale level are bought and sold as a commodity, which adds complexity to track individual stones on the trader's account. The result is often a battle between the diamond traders and the tax administration, which leads to legal uncertainty, "- said in a press release.
"The new income tax regime specific to the diamond traders in Belgium (" Diamond mode ") seeks to solve this problem by introducing the tax base calculation method of income diamond traders, which does not require the tax administration to check the evaluation of diamonds and diamonds on the trader's account. As part of the "rough treatment" calculation of the gross profit of the trader is based on a fixed percentage of turnover, which leads to the calculation of the fixed value of the acquired stones and changes in inventories (in cost of goods sold) during the reporting period ", - says the European Commission.
All this means that the annual recurring difficulties with the tax control, which many diamond dealers have faced in the past will not happen again, said AWDC (Antwerp World Diamond Centre, AWDC) , commenting on the decision of the European Commission.
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