Tax Pre-Payment Plan
- Spread your repayments without upsetting your financial equilibrium
- Avoid paying a tax surcharge if you run a company
- Make sufficient payments in advance and enjoy tax relief if you’re self-employed or a liberal professional
What are tax pre-payments?
When you’re self-employed, a liberal professional or run a company, it’s difficult to estimate beforehand how much you’ll earn in the current year. That’s why ‘tax pre-payments’ were introduced by the tax authorities to encourage business owners to pay the tax on their business income in advance. In effect, they constitute an advance payment towards the final tax bill due in the assessment notice.
More information about the KBC Tax Pre-Payment Plan
People regularly forget to pay their tax in advance. However, correct and timely payment brings many financial benefits.
With the KBC Tax Pre-Payment Plan for Business Purposes, you can pay your taxes upfront without upsetting your financial equilibrium. Plus, you don't have to worry about pre-paying your tax on time. We do it for you.
- You don't have to worry about pre-paying your tax on time. We do it for you. That ensures you avoid the possibility of being hit with a tax surcharge by the tax authorities. You may even be able to claim a tax abatement or tax relief as well, if you’re self-employed or a liberal professional.
- You repay the financing in instalments over a period of 12 months.
- You keep your own funds free for other purposes and your cash resources intact.
- The interest you pay for the financing is tax deductible.
- You avoid a tax surcharge from the tax authorities.
- Your pre-payments are made more feasible.
It is always difficult to determine how much you should pay in advance. Determine and calculate the amount you want to pre-pay this year based on an estimate of your expected income.
Last year's results might be a good place to start. Using that amount, you should be able to estimate your income for this year and calculate the taxes that you will have to pay.
If it's the first time you've set up a sole-trader company as a full-time self-employed person or liberal professional, the good news is that you're exempt from making pre-payments for three years, during which time the tax authorities won't impose any tax surcharges.
If you've set up a new company that meets the definition of a small business under company law, you qualify for this same tax break.
If you’re self-employed or a member of the liberal professions and pay 106% of the taxes you owe in advance, you’ll receive a tax abatement or tax relief from the tax authorities. In other words, a reduction in the taxes you owe.
Exception: newly (full-time) self-employed persons, liberal professionals and small companies (under specific conditions) are exempt from a tax surcharge in the first three years after being established. They can, however, receive a tax abatement even if they don’t make payments in advance.
Companies are never entitled to a tax abatement if they’ve paid too much upfront.
For financial years that coincide with calendar years, pre-payments will have the following benefits:
When you’re self-employed, a liberal professional or run a company, you receive a letter from the tax authorities in the early months of the year, offering you the opportunity to pay your taxes upfront. In principle, you are under no obligation to do so, but if you don’t pay enough or anything in advance, you risk being hit with a penalty in the form of a tax surcharge on the final tax bill.
The rates and how the tax relief or tax surcharge is calculated can be found on the FPS Finance website.
Percentages and method of calculating tax relief:
- For the self-employed and liberal professionals
- Companies are not entitled to this type of tax relief
Rates and the way tax surcharges are calculated:
Apply for your tax pre-payment plan in KBC Touch, KBC Mobile or the KBC Business Dashboard. You can also ask Kate, your digital assistant in KBC Mobile, to arrange a new credit facility or tax pre-payment plan for your business.
* Decisions on business credit facilities of up to 150 000 euros should be available within 24 hours of applying online or by appointment, provided your application is complete.