IPP and Related Concepts — Vocabulary Flashcards (Video Notes)

Vocabulary flashcards covering IPP fundamentals, domicile and residence concepts, real estate taxation, movables, CPDI, and related Belgian tax terms drawn from the lecture notes.

IPP (Impôt des personnes physiques)

Belgian personal income tax; a direct tax on residents (inhabitants du Royaume) that taxes all income (globalisation) with progressive rates, taking personal circumstances into account; annual taxation; not deductible against foreign taxes.

Territoriality

Principle that IPP applies to inhabitants of Belgium; residency in Belgium determines liability, with domicile or seat of fortune used to establish habitant status.

Globalisation

Tax base includes the taxpayer’s total income from all categories (mobilier, immobilier, professionnel, divers) with some exceptions; income from abroad is generally taxed by Belgium, subject to CPDI rules.

Progressivity of IPP

IPP rates rise with income (25% to 50%); Belgium has very rapid progressivity (high threshold reaches 50%).

Tax-free threshold (quotité exemptée)

A portion of income is not taxed; in the notes, a threshold below 10,000€ is mentioned as a tax-exempt amount.

Categories of income under CIR

Four main categories: Mobilier, Immobilier, Professionnel, Divers (and related concepts like Pension and Patrimoine) used to define taxable income.

Revenus mobiliers (movable income)

Income from movable assets, including dividends, interests, rents from movable property, royalties, and certain annuities; taxed under specific rules and rates; capital gains on mobiliers are generally not taxed unless exceptions apply.

Précompte mobilier (PM)

Withholding tax on movable income (dividends, interest, etc.) at source; standard rate 30% since 2017; can be liberatoire (with the option to credit or override with globalisation); exceptions for foreign sources.

Précompte immobilier (PrImmo)

Regional annual tax on real estate; tax base is the revenu cadastral (RC); regional rates (Flanders 3.97%, Wallonia/Brussels 1.25% with additional communal surcharges); not imputable against IPP and not refundable; reductions and exemptions exist.

Précompte professionnel (PrProf)

Withholding tax on employers for employees’ remuneration; advances or withholdings contributing to IPP payments; can be offset or credited against IPP.

Revenu cadastral (RC)

A notional or fictitious annual income for a property used to calculate PrImmo and, in certain cases, IPP; determined per parcel and indexed; used to value real estate for tax purposes.

RC indexing and revalorisation

RC is indexed annually; built properties have a higher base (RC indexed plus 40% for many cases); revalorisation rules and caps (e.g., 2/3 RC revalorisé) limit excessive rent calculations.

Domicile fiscal and siège de la fortune

Two alternative criteria to establish tax residence: domicile (home) and seat of fortune (centre of economic interests); both evaluated by facts; CPDI may affect residency status.

Domicile

Evidence of a Belgian domicile based on various factual factors (home, family, work, banking, residence, etc.); the domicile proof is fact-based and can be rebutted with evidence.

Siège de la fortune

The place where the taxpayer’s fortune is managed; center of economic/material interests; can remain Belgium-based even if assets are abroad.

CPDI (Conventions préventives de la double imposition)

Treaties preventing double taxation; use tie-breaker rules to determine which state has the primary right to tax when tax residency is unclear or dual residency exists.

Centre des intérêts vitaux

One of the CPDI criteria; location where family, social and economic ties are strongest.

Foyer d’habitation permanent

Permanent home kept at disposal as a key CPDI criterion for determining residence.

Ménage (home) and presumption of residence

Presumption regarding where the household is located; for married couples, the domicile is where the household resides; some presumptions are irrefragable for married spouses.

INR/IPP

Tax category for non-residents: non-residents living abroad may be taxed on Belgian-source income (e.g., Belgian property) under IPP rules.

ISOC, INR/ISOC, INR/IPP, IPM

Classification of tax regimes under CIR: ISOC (corporate tax), INR/ISOC (foreign company with Belgian income), INR/IPP (non-resident individual with Belgian property), IPM (imposable for non-profits and certain entities).

Immeubles situés à l’étranger (foreign real estate) and RC for foreign properties

From 2022, IPP calculation for foreign real estate uses RC; foreign taxes are not deductible unless covered by CPDI; progressivity still applies for other income.

Affectation professionnelle des revenus mobiliers

If movable income is used for professional activity, it may be treated as professional income; PM remains applicable; the income is integrated into the professional income tax base.

Location et sous-location, meublée et non meublée

Rentals are typically taxed at the owner level (immobilier); furnished rentals can be split into real estate rent and furniture rent; if not split or registered, 60%/40% allocation may apply and 40% may be taxed as movable income.

Location mixte et ventilation

If a property is used for both private and professional purposes, tax is allocated according to the contract and use; if not clearly stated, the entire lease may be treated as professional income for the tenant.

Loyer et RC pour base imposable

For built properties, base is RC indexed plus 40%; for non-built, base is RC indexed only; in some arrangements, the actual rent may determine taxation; special cases exist for private vs professional use.

Location meublée (furnished rental) nuances

For furnished rentals, the contract may split rent between property and furniture; if not clearly split or registered, admin may allocate 60% to real estate and 40% to movable income.

Versements anticipés (VA)

Advance payments on IPP tax; optional but used to avoid large year-end payments; if no employer withholds, VA can be used to prepay taxes.

Tax shift (policy theme)

Policy aim to move tax burden from labor to consumption and wealth; maintain IPP rates but adjust brackets to slow progression; introduce or increase taxes on assets (e.g., stock accounts) and regional housing measures.

VVPRbis

Reduced PM rate (15% or 20%) on dividends paid to certain named individuals after capital contributions, designed to encourage SME capitalisation.

Opportunities around asset transfers to a société de patrimoine

Carrying real estate into a patrimony company can impact IPP, succession planning, financing and VAT considerations; may alter how rental income is taxed.