2023-08-01 06:05:00
If the federal government had to record, on the eve of July 21, the failure of the tax reform long promised by Vivaldi, the Minister of Finance, Vincent Van Peteghem (CD&V), will console himself with the tax reform on copyright revenue. We remember: the announcement, in the fall, of the abolition of this “niche” tax had provoked an outcry. The IT sector and technology companies, from the south as well as from the north of the country, went to the barricades to denounce a project that had the effect of excluding software developers from the copyright regime.
Faced with the challenge and disagreement of the MR, yet a partner of the De Croo government, the Minister of Finance did not bend. On December 22, following a final battle of arms, a program law – which included the reform of the copyright tax system – was voted in Parliament, and this, subject to a small rewriting of the text (which, as as you will read, plunged the IT sector, the tech ecosystem, lawyers and tax advisers into troubled waters).
taxation: the symbol of a strange phenomenon
Thus, since January 1, a new tax regime on copyright income has been applied (with a transitional period of one year). In short, we have returned to a regime more in line with the spirit of the original law of 2008 (protecting income, collected in an “irregular and random” manner, from the creation of literary or artistic works), with a reduced scope and strengthened conditions.
The end of illusions?
Seven months following the entry into force of this system, critical voices have given way to a form of resignation and concern among companies which, for several years, have benefited from a tax advantage enabling them to offer higher wages appealing to IT professionals and developers. While some have decided not to let go (seven computer companies and 70 software developers recently seized the Constitutional Court), the vast majority of the companies concerned no longer have any illusions. “I tried to sell the solution of recourse to my clients”, explains David De Backer, co-founder of the tax firm Egide, which advises several large employers and a hundred freelancers in the IT sector (see also here – once morest). “They all answered me in the negative, considering that it was a waste of time”.
quote
“Our employees, regarding 70% of whom receive part of their remuneration in copyright, are bound to be worried and they are starting to ask us regarding what will happen from January 1, 2024.”
On the business side, many employers are wondering how they will be able to circumvent the obstacle of the end of copyright for computer scientists and software developers. “Until the end of this year, we are covered by a tax ruling, testifies Eric Delacroix, co-founder of Eura Nova, a company specializing in “Big Data” and artificial intelligence, which employs around a hundred people in Louvain-la-Neuve. But our employees, regarding 70% of whom receive part of their remuneration in copyright, are bound to be worried and they are starting to ask us regarding what will happen from January 1, 2024”. Initially, Eura Nova made parsimonious use of copyright. But, faced with more aggressive competitors, the company had ended up systematizing them. “During recruitment, candidates showed us what competitors were offering them as net salaries. We didn’t have much choice”.
A dead loss for some employees
In the old tax system, depending on the percentage of remuneration declared in royalties, the gain might be significant for computer scientists and developers. With a copyright tax of between 7.5% and 15% (the tax rate varies according to the type of withholding tax and the income brackets), the surplus salary might easily reach between 200 and 600 euros net per month.
The question that now arises is to know the attitude that employers in the sector will adopt when, from the end of January 2024, employees discover their payslip amputated by a few hundred euros. “We are looking, says Eric Delacroix. But, at the time when I am speaking to you, we do not yet have the answer to this question”. The bosses, especially those who run smaller IT companies (start-ups, scale-ups, SMEs), are all the more concerned that they have already seen their payroll swell significantly in recent months. “Our HR budget has exploded, confirms the co-founder of Eura Nova. Between 2022 and 2023, just the indexation of 11% represented an extra charge of 800,000 euros”.
For Caroline Vandenplas and Geoffroy Piroux, managing partners of B12 Consulting (a company specializing in artificial intelligence, data science and software development), it is also vagueness that presides. “Employees ask us questions. They are worried,” they say, adding in passing that they are disappointed to see the Belgian State withdraw its support for innovation and the creation of intellectual products in the digital and software fields. B12, which employs around forty people, believe that with the end of the copyright regime for developers, going abroad will once once more become very attractive. “Between 80 and 90% of our costs are represented by salaries. If we want to remain competitive, we will have to adapt”.
Looking abroad?
How, in a context of “war for talents”, remain competitive and profitable? This is now the question for many Belgian IT and tech companies. The issue is all the more critical as the sector has become a major provider of highly qualified jobs. “If we want to maintain the net salary of our employees (by increasing the gross salary, Editor’s note), we will be forced to increase our rates, which is difficult to envisage when we want to grow”, underline Caroline Vandenplas and Geoffroy Piroux.
Even before the adoption of the copyright tax reform, B12 Consulting had also decided to expand beyond the Belgian borders (while maintaining the heart of the company in Belgium). Will this internationalization strategy be accelerated by the loss of the tax advantage that B12 offered to these developers and designers of software solutions? “ is not the primary reason. But the reform comes, in a certain way, to reinforce our choice. It is also, for B12, a way of ensuring the sustainability of the company and of mitigating the European risk”, respond Ms. Vandenplas and M.Piroux.
The CEO of a Brussels start-up active in tech, who prefers to remain anonymous, is quite pessimistic regarding the sustainability of his company. Of the fifteen employees, half are developers. “Either they agree to return to the situation before the use of the copyrights, or they will ask me to compensate. But to compensate 200 euros net gross, it will cost me regarding 600 euros! I find myself back once morest the wall”.
1690877502
#tax #advantage #developers #Belgian #tech #seeks #parade
