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Since 1 April 2016, employers in the market sector, unlike non-profit sector employers, are no longer entitled to the 1% AIP reduction (or the structural exemption from payment of advance withholding tax). Within the framework of this measure, adapted work enterprises belonging to Joint Committee 327 fell under the market sector. However, it was decided to make them fall under the non-profit sector with retroactive effect from 1 April 2016.
The AIP reduction is a reduction of tax burdens in the form of an exemption from payment of a part of the advance withholding tax which is granted to employers in the private sector and certain public limited liability companies under public law. The exemption corresponds to a percentage of the gross amount of the wages before deduction of personal social security contributions.
Since 1 January 2010, the percentage of the exemption has amounted to 1%. It may be increased to 1.12% provided that the enterprises and natural persons meet the definition of an SME as laid down by the Companies Code (Article 15, § 1 to § 6).
As announced in our Infoflash of 21 April, market sector employers are no longer entitled to the 1% AIP reduction. If they meet the conditions to be considered an SME, they are still entitled to the 0.12% AIP reduction.
Non-profit sector employers (= employers belonging to one of the following Joint (sub-)Committees: 318, 318.1, 318.2, 319, 319.1, 319.2, 329,329.1, 329.2, 329.3, 330, 331 and 332 are still entitled to the 1% AIP reduction. If they meet the conditions for being considered an SME, the percentage of the exemption is increased to 1.12 %.
Adapted work enterprises were initially considered as enterprises falling under the market sector, which meant that they were no longer entitled to the 1% AIP reduction.
Within the framework of this measure, adapted work enterprises belonging to Joint Committee 327 now fall under the non-profit sector. In other words, they may continue to use the 1% AIP reduction with retroactive effect from 1 April 2016.
Unlike the other enterprises falling under the non-profit sector, they are not required to allocate 3/4 of the exemption to the funding of the social Maribel funds.
Source: Crowdfunding (Recognition and Supervision) Act of 18 December 2016laying down various provisions on financial matters, Belgian Official Gazette of 20 December 2016, 3rd Ed.
Author: Peggy Criel
12/01/2017
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