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Antwerp diamantaires accept new tax system
Say it would lead to higher taxes but also financial predictability and legal certainty
By: Diamond World News Service
Mar 31 2015 4:41PM
Reference: 11322  

Pursuant to the Belgian government’s decision to introduce a tax system calculated on a lump-sum basis, the AWDC noted that, “Diamantaires are willing to pay higher taxes in exchange for financial predictability and legal certainty”, says Ari Epstein, CEO of the Antwerp World Diamond Centre.

Under the new tax system, diamantaires would be taxed according to a fixed percentage of the turnover, for profits and losses, instead of on a percentage of the profits. This tax would require the diamond traders to pay higher taxes than they do currently, but it will ensure the required stability and legal certainty.

The banking crises which caused a drastic decline of finance availability, has placed much pressure on the diamond industry.

Fiscal predictability decisive

Within the international diamond trade circuit, Antwerp is competing with other centres like Dubai, India, Israel and Hong Kong, which also specialize in the diamond trade, but the conditions under which they operate are entirely different from Antwerp. The uncertain and often non-competitive fiscal environment is responsible for the fact that diamond traders often see no reason to realize their turnover and profits in Belgium. This creates losses for the Belgian government, while Antwerp as a trade center is also threatened with losing its leading position as a competitive diamond trade center.

CEO Ari Epstein: “Because the new system is a tax on turnover instead of profits, diamond traders know precisely what to expect when they close their financial year.”

Long-term foothold crucial

The continued existence of Antwerp as a diamond trade center largely depends on the extent to which companies can establish a long-term foothold here. The legal certainty emerging with the new tax system, will ensure that it will be more interesting for diamantaires to once again realize their increased turnover and profit in Belgium. In this way, diamond traders will also obtain easier access to financing, which is crucial for the financial viability of their companies.

Ari Epstein: “Given the difficult budgetary situation, we understand that the government requires additional efforts from every industry. As a representative organization, we will try to defend this position to our members in exchange for legal certainty and a stable fiscal environment.”

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