The diamond tax has led to collisions between the diamond sector and the tax authorities for quite some time now. During the budgetary control, the federal government decided to impose a tax. This has to yield an extra 50 million euros, while the sector contributes 20 million through corporate and personal income taxes. With this diamond tax registered wholesalers are no longer taxed on their profit, instead they will have to pay 0.55% on their turnover. Currently it is not evident for the diamond sector to prove what their taxable base is, as the diamond prices are constantly changing. Diamond prices depend on their values at the bourse, its current state (rough or polished), etc… In the past, this has often led to possible questions of the tax authorities to the diamond sector.
There was a lot of criticism from the opposition and the State council questioned the tax by stating Europe could see this as state aid. However during the last summer holiday, the European commission gave a green light for the Belgian diamond tax. In its conclusion, the Commission stated the tax is not a state aid in disguise. According to the commission, the system will make diamond dealers pay more taxes.
Conclusive fiscal treatment
In September the Secretary of Finance Johan van Overtveldt will propose an adjusted bill to the cabinet. ‘This European approval is proof that this measure is not a state aid and is therefore no favor regime, like some falsely claim,’ Van Overtveldt reacts. ‘With the diamond tax we finally have a conclusive fiscal treatment of a very complex sector, not dependent on the diamond prices. This measure will make the sector contribute 50 million euro more on a yearly basis, compared to before. The diamond tax is part of the tax shift and contributes to reducing the tax on labor. The government says that the diamond sector, with Antwerp as one of its world centers, gets more judicial security and that the unending series of conflicts with the tax authorities is at an end. It is expected that the parliament will approve the tax in November.
Would you like to explore the possibilities of investing in diamonds, then BAUNAT DIAMONDS will gladly offer you its expertise.