Paul Verhaeghe contributes to new legislative proposal on digital taxation

Paul Verhaeghe contributes to new legislative proposal on digital taxation

Paul Verhaeghe, acting on a personal basis and together with Roel Deseyn, drafted a new legislative proposal on digital taxation that adapts the Belgian income tax system to the digital economy. To this end, the text employs three major levers: a digital permanent establishment for enterprises without a traditional physical presence, a minimum tax on certain digital activities, and a digital withholding tax. Additionally, the proposal introduces further reporting obligations for natural persons holding crypto assets and tokens.

In concrete terms, the text mainly targets situations in which digital activities create economic value in Belgium without a proportionate tax contribution being made today. The proposal links that taxable presence to measurable thresholds, such as the number of users, connections, or digitally concluded contracts in Belgium. Once those thresholds are exceeded, part of the turnover attributable to Belgium could be taxed under a specific regime.

Another notable feature is that the proposal develops a minimum contribution based on income attributed to digital activities, supplemented by a digital withholding tax. For private individuals, the text also introduces an explicit reporting obligation for tokens and certain transactions involving virtual assets. If this regime were ever adopted, it would apply to income earned from 1 January 2027 onward.

Download the legislative proposal below.

Also read on Wanted Law:

• A tax challenge: how make digital players contribute?
• OECD Pillar I - Two-pillar solution for the tax challenges of the digitalisation of the economy
• OECD Pillar I - Amount A - Draft model rules for Nexus and Revenue Sourcing
• UN comment input on Article 5 on digital activities
• UN comment input on Article 7 on digital activities