Extension of the aid areas for eighteen months

In principle, the aid areas around Genk and Turnhout will end at the end of April 2021. As the corona crisis put an unexpected brake on investments in these areas, it was decided to extend the application period for all aid areas. Good news if you invest in these areas!

Why good news?

Employers who invest in an establishment located in an ais area benefit from a tax reduction. They are temporarily exempted from paying 25% of the withholding tax to the Treasury. This exemption only applies only to the withholding tax calculated on remunerations paid in response to the new jobs that were created thanks to the investment.

The exemption amounts to 25% of the withholding tax calculated on the wages of the employees who take up the new jobs. Only the remunerations of employees awarded within two years from the time the new job is occupied qualify for the measure.

Extension of the aid areas

The corona crisis put an unexpected brake on investments in aid areas so that companies could not fully benefit from the tax relief. Extending the period of application of the aid areas should therefore give companies extra time and oxygen.

Flemish Region

The Flemish Region has three aid areas. They are situated around Genk, Turnhout and Zaventem-Vilvoorde. The application period of each aid area is extended by eighteen months:

To get an accurate view of the defined regional aid areas we recommend you to consult the web application Geopunt, developed by the Flemish Region (on the right side click on “Landbouw, visserij en economie” – “Bedrijven” – “Steunzones”).

Walloon Region

The four aid areas in the Walloon Region are situated around Seraing, Sambreville, Charleroi and Frameries. The application period of each aid area is extended by eighteen months:

The Walloon Region has developed a web application on its geoportail that makes it easy to check whether a given parcel or address is located in an aid area or aid region.

For which employers?

The measure is mainly applicable to employers from the private sector. They are divided into two groups: SMEs and large enterprises. SMEs benefit from more favourable conditions for the application of the exemption.

A number of employers and sectors are excluded from the application of the measure.

Conditions

Investment in an establishment in the aid area

Only employers that make investments in an establishment located in an aid area can benefit from the measure. In addition, the investment must have received regional aid and must comply with specific conditions.

In the case of large companies, the measure will apply only if the investment is in an establishment located in Group A of the aid area. These are parts of the aid areas which fall within the aid regions specified in the regional aid map.

Creation of new jobs

The investments must lead to the creation of new jobs. Only a new job created by the investment and occupied within 36 months of completion of the investment will be eligible for this measure.

Job retention

The exemption from payment shall not be permanently granted until the employer demonstrates that the new job has been maintained for at least three years. In the case of large companies, the new job must be maintained for at least five years.

Submit form

In order to claim the exemption, a form No. 274SZ must be submitted correctly at the latest in the third month following the completion of the investment. The exemption can be calculated from the time of submission of the form at the earliest.

Do you have any questions?

If you would like to know whether your company meets the conditions for benefiting from the withholding tax exemption, contact our Legal Partners at legalpartners@partena.be for a concrete analysis of your situation.

Source: Press release of 2 April 2021 by the Minister of Finance, Minister Van Peteghem extends aid areas by eighteen months.