These problems appeared in the midst of the well documented worldwide financial crisis, where debt ratios exploded and evidence of many state’s incapacity to handle social security and manage public finances and expenditure became more obvious every day.
Recent forecasts predict a decrease in domestic demand and eventually a drop in exports, despite the rise of public consumption and investments; fortunately, a recovery is expected some time this year.
When a Member State needs money and cannot count on economic development, especially in times of crisis, there aren’t many solutions: heavier taxation, or increase of the taxable basis, especially by driving out new taxpayers or undeclared funds.
Moreover, the signature of an important number of information exchange agreements and treaties, as well as compliance, as of January 1, 2010 with the EU savings’ related regulation and thus, the participation to the automatic exchange information system of the Savings Guideline, led to a more important restriction of bank secrecy.
This was inevitable: in Belgium, as elsewhere, the expanse of taxpayer liberty has been reduced a little bit more… once more.
So, the question remains: what can one still do to maintain those privileges and, if possible, improve its situation?
Belgian law firm Afschrift offers perspective on the changing face of European liberty.
Creativity and innovation
Create has always been the cornerstone of the team, a tax law firm created in 1994 as a partnership of lawyers specialising in tax issues.
Afschrift is a niche tax boutique, as tax issues are among those that can be dealt with most easily through a medium sized structure, because, given the speed of changes in tax law, in order to be really effective, a lawyer must be acutely exclusive.
The firm, headquartered in Brussels, the home of the European Commission and the Council of Ministers, has also strategically located offices throughout Europe, in Luxembourg, Geneva, Madrid and
Tel Aviv.
Notwithstanding its size, Afschrift, already a member of the 2009 World Finance 100 (www.worldfinance100.com) has been awarded as Best Belgian Tax Law Firm 2006 (Belgian Legal Awards), Corporate Tax Law Firm of the Year – Belgium 2009 (ACQ magazine), Best Law Firm in Belgium for Corporate Tax Law 2009 (Corporate International magazine), Boutique Tax Advisory Firm of the Year in Belgium 2010 (Corporate International magazine).
As for managing partner and founder Thierry Afschrift, also professor to the Free University of Brussels and deputy judge to the Court of Appeal, he has been selected as the Best Tax Lawyer-Belgium 2009 (World Finance) and is considered among the leading tax lawyers of his generation.
The secret of success of this small group of people is innovation: Afschrift’s lawyers are widely recognised for their creativity in the international tax planning field, while also concentrating on domestic tax and white collar crime law issues, as well as mergers and acquisitions, financial instruments and, especially, tax planning.
While professional excellence is permanently achieved by means of a profound and up-to-date knowledge and practice of the tax system and rules, most of the firm’s partners teach law at the university and the Brussels School of Economics and Management, of which Thierry Afschrift is the chairman of the Master on Tax Management.
All the firm’s lawyers also publish various articles in law reviews, while organising, at least twice a year, colloquiums on tax law topics.
International tax planning is the firm’s main activity. This is why Afschrift is also established in the most important market places: for example, the extremely innovative Luxembourg law can help clients with its sophisticated and advantageous structures for tax purposes while Spain is attractive, especially for operations connected with Latin America.
Afschrift’s lawyers are also active in litigation, defending clients during tax controls and before Belgian and EU courts; the firm has actually intervened in most of the important tax and white collar trials in Belgium throughout the years.
The firm’s clientele includes individuals, industrial and commercial companies, as well as several major banks and estate companies, established in Belgium, Luxembourg, Switzerland, Spain, Israel or elsewhere.
If there is a problem, there is a solution
Because of the traditionally heavy Belgian tax burden, the firm has always occupied in an important position in the nation’s business environment. Nevertheless, the firm’s target is not only to help clients navigate in the troubled waters of Belgian tax (over)regulation.
Of course, in the first place, one has to adapt his or her tax situation to the new rules and, to do so, the firm has developed a number of legal and efficient mechanisms and structures which may be used by any EU resident, individual or company.
But, on another level, Afschrift’s lawyers help individuals and corporations to plan their future operations in order to achieve tax optimisation. Confronted with such a situation, the taxpayers’ first concern is to avoid heavier taxation, thus counter-productivity and management problems.
The first solution is often the delocalisation of the people, of the business or the inheritance. From this point of view, Switzerland and Luxembourg offer the best alternatives as they have managed to contain their debt and stabilise their budget.
On a patrimonial level, acting in an environment such as the one described above, people will no longer be able to hide their inheritance but, instead, they will have to invest where the tax burden is lighter.
Asian places, Hong Kong and Singapore primarily, as well as other European places affected by the Savings Guideline, have started to put forward their master trumps. It is the same thing for Luxembourg, thanks to the extraordinary creativity of its lawmakers.
And Belgium?
One should not be mistaken, Belgium offers foreign investors several interesting possibilities.
Actually, it is important to know that Belgian law admits the “right to choose the least taxed way” principle, which essentially provides that the taxpayer has the right to choose, when setting up an operation, the most suitable route in order for his operation to generate the least taxes possible.
This principle, which concerns direct, indirect, inheritance and gift taxes, is essential in the tax optimisation activities of individuals or corporations and gives clients the opportunity to use, legally, Belgian or foreign structures in order to achieve their targets.
Beside this capital principle, a number of measures have been adopted these last few years in order to improve the country’s image abroad, as the Belgian economy has always been dependent on imports and international trade.
Thus, Belgian law has been enriched with various institutions and rules such as notional interest deduction, exemption of dividends from pre-levies, deduction of patent revenues and, of course, the OFP (Organisation for Financing of Pensions), which is a vehicle presenting important advantages and being used today by an important number of multinational companies in order to structure their pension funds.
Beside these rules, and the well known Belgian holding, Belgium has also set up special tax regimes for royalties and a “tax shelter” system for taxpayers who choose to invest in the audiovisual.
If applied as they should, these special regimes can be highly interesting for foreign investors.
Not only a job, but also a philosophy
A tax lawyer does more than optimise taxpayers’ patrimonial situation or trial tax cases.
More than all this, he takes on the tax authorities, thus the Member State. This is his/her real challenge: to make sure that authorities stop where the law specifies, and the role of the lawyer is to use the law for the benefit of those who consult him or her.
Afschrift’s lawyers are particularly attached to this idea of (tax) justice and this is a real trademark of the firm.
In conclusion, Afschrift draws upon the diversity of its attorneys and their talents while preserving an efficient structural organisation and permanently trying to provide state-of-the-art professional services and, in the same time, attend to the respect of the rights of the taxpayer.
For further information: www.afschrift.com
