Belgium approves Carat Tax

The Belgium diamond industry has been served the new ‘Carat Tax’ or the ‘Diamond Regime’, as the Belgian Parliament passed the new legislation on corporate tax for the industry, as per reports. According to AWDC, the corporate tax will now be levied on a lump sum amount, calculated as a percentage of the turnover of the company and not on profits. This new tax is applicable from fiscal 2017 and considers income of the current year.

The AWDC believes the new tax will being about more predictability and stability, giving diamond trading companies the ease of forecasting their total corporate tax due based on their diamond sales. Also, the secondary effect of the tax will strengthen the capital base of diamond trading companies, improving their access to finance.

The Carat Tax, according to AWDC will help end complex annual discussions over control and valuation of stock, Also the fluctuations in inventory will not impact tax. The new tax structure is expected to generate over three times the tax per year, according to a report by European Commission (EC), as per media reports.