Have you forgotten your tax pre-payments on occasion in the past? Paying the right amount at the right time can mean big savings. Find out more about the KBC Tax Pre-Payment Plan to enjoy all the tax benefits.
Why are pre-payments a good idea?
The tax authorities send you a letter every year in spring to offer you the opportunity to make pre-payments. In order to encourage companies and the self-employed to pay their taxes as the tax year progresses, the legislator imposes a tax increase if insufficient pre-payments have been made.
A second advantage of pre-payments is the tax benefit or tax relief it offers for the self-employed and liberal professions. If you pay 106% of the taxes you owe in advance, the tax authorities will give you tax relief. Find out how the tax authorities calculate this tax relief.
The tax increase is set at 2.25 times the base rate rounded off to the lower unit.
The base rate for the 2017 assessment year was 0.50%, so the tax increase was 1.125% (0.50% x 2.25). Because the actual income from pre-payments turned out to be rather limited, the government decided that the base rate must never be less than 1% (starting from the 2018 assessment year).
If we multiply the base rate by 2.25, the result is an increase percentage of 2.25% (2.25 x 1%). In other words, the legal amendment aims to encourage companies to pre-pay more and to do so at an earlier date. Sufficient pre-payments can neutralise the tax increase. The benefit to be gained depends on when the pre-payments are made.
Starting from the 2018 assessment year, no increase will apply if the calculated amount for the increase is less than 0.5% of the tax it is based on or 80 euros.
Tax benefit or tax relief
When do you have to make your pre-payments for the 2018 assessment year and what are the benefits?
For tax years that are the same as the calendar years, pre-payments will have the following benefits:
2018 assessment year
Base percentage to calculate the increase: 1%
Global increase (base percentage x 2.25): 2.25%
Pre-payment for the 1st quarter: no later than 10 April 2017: 3%
Pre-payment for the 2nd quarter: no later than 10 July 2017: 2.5%
Pre-payment for the 3rd quarter: no later than 10 October 2017: 2%
Pre-payment for the 4th quarter: no later than 20 December 2017: 1.5%
What is a tax pre-payment plan?
The tax authorities encourage the self-employed, members of the independent professions and companies to pre-pay the tax on their earned income.
With the KBC Tax Pre-Payment Plan for Business Purposes, you can pre-pay your taxes without upsetting your financial equilibrium. It’s up to you to decide when you want to pre-pay your taxes and when you want to start making repayments. We will draw up a pre-payment plan tailored to meet your needs and take all the worry out of tax pre-payment.
- You to decide when you want to pre-pay your taxes
- Your tax pre-payments are made on time
- You can spread your repayments over time
- You to decide when you want to start making repayments
- You keep your funds free for other purposes and your cash resources intact
- The interest is tax-deductible
Never forget your pre-payments again
By pre-paying your tax, you avoid the surcharge imposed by the government. The beauty of a KBC Tax Pre-Payment Plan for Business Purposes is that it eases the burden of making these payments.
- KBC pays the government on your behalf at the most advantageous time
- The interest charged on the finance is fully tax-deductible
A pre-payment plan geared to your situation
- The repayments to KBC can be spread to suit your personal financial situation
- You spread the tax burden over the whole year as a result
Extra tax relief for individuals (natural persons)
If you pre-pay more than necessary, the tax authorities will grant you a tax rebate on top of the tax benefit.