Federal Public Service FINANCE TAXES AND TAX COLLECTION

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Legal issues in the EURO changeover process Experience of Belgium : common approach in regulation Prague, January 14 th en 15 th, 2008 Christiaan DELAERE Director of Administration of Fiscal Affaires former Chairman of Administrative Committee of Regulation 1

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Content Admi-euro Administrative Committee of Regulation Timing Uniform conversion rules Conversion of amounts Acceptance Success factors 2

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Admi Euro Conversion into Euro = enormous conversion project Who is involved? All residents All companies All ministries and authorities. . . Everybody ! For the conversion of the complete apparatus of government : co-ordinated approach necessary : Admi-Euro 3

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs 21/03/2003 Admi Euro Multidisciplinary group All administrations are represented : Federal ministries Semi-governmental bodies Regional ministries Provinces and municipalities Also represented: National Bank of Belgium Council of State Under chairmanship of Secretary-general Ministry of Finance Co-ordinates conversion into Euro 4

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Administrative Committee Regulation What? : one of of 4 administrative committees within Admi-Euro Chairmanship: Initially: Ministry of Justice Later: taken over by Ministry of Finance Started: March 1997 Assignment: conversion of all regulations towards euro before 01/01/2002 All administrations are represented 5

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Timing (1) Influenced by European regulations First meeting : march 1997 Draw up conversion rules Draw up Eurolaw 1 : Law of October 30, 1998 concerning the Euro Draw up 2 special laws introducing the Euro : Law of June 26, 2000 concerning the introduction of the Euro in legislation (Art. 78 Constitution) Law of June 30, 2000 concerning the introduction of the Euro in legislation (Art. 77 Constitution) 6

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Timing (2) Draw up directives for future regulation (circular letter of October 20, 2000) Draw up Eurolaw 2: Law of December 10, 2001 concerning the permanent introduction of the Euro Period 1999 -2001: Royal decrees converting legislation into Euro End 2001: circular letters for the public servants in ministries All legislation was published in the OJ before 1/1/2002 Ratification laws : June 20, 2002 and June 26, 2002 7

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Uniform conversion rules Uniform rules – coherent and clear notation (rules with respect to legislation technique) Laws and Royal decrees are built according to similar plans Use always same type of notation Converted amounts are presented in schedules: “in the next articles of the code of… the amounts in BEF in the 2 nd column are replaced by the amounts in the 3 rd column Art. 23 1. 000 25, 00 EUR Art. 28 10. 000 250, 00 EUR 8

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Uniform conversion rules coherent and clear notation Fixed rules with respect to notations in euro : In texts one should always write “euro” A part of Euro = “cent”, never “eurocent” Fixed amount in laws: always “EUR” : 9, 54 EUR Amount is always written in Arabic numerals : 1. 000 EUR and not thousand EUR In texts of a law all amounts are written with 2 decimals : 1. 000, 00 EUR and not 1. 000 EUR In written texts one can use amounts without the decimals: 1. 000 EUR. Or even 1. 000 euro. 9

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Conversion of amounts Principles: No prohibition, no compulsion Continuity of legal instruments All amounts in the national currency are read as they were converted in euro Art. 14 Council Regulation n° 974/98 of may 3, 1998 on the introduction of the euro If nothing is mentioned : mathematical conversion 1 EUR = 40, 3399 BEF No need to change legislation? ? ? 10

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Conversion of amounts –problems Readability: 1 EUR = 40, 3399 Belgian francs (BEF) Result : 1. 000 BEF = 24. 789, 35 EUR; No more transparent amounts: • e. g. 1: minimum capital of limited companies by share: 2. 500. 000 BEF = 61. 973, 38 EUR? ? • e. g. 2: exemption of tax on interest from saving deposits: 50. 000 BEF = 1. 239, 47 EUR? ? 11

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Conversion of amounts –problems Uniformity : Round up ? ? Round down ? ? Ex: round off 3. 000 BEF to 74 EUR ? ? To 75 EUR ? ? ? Or to 80 EUR ? ? Rule : always similarly round off same amount in same circumstance Legal security? Some amounts are converted and other are not? Conversions to be expected? 12

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Conversion of amounts – solutions Decision to convert all amounts: All amounts rounded up or down All amouts converted mathematically Advantages: Clear communication No doubt about the new amount in EUR Legal security 13

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Conversion of amounts – results Series 1: July 20, 2000: 12 Royal decrees/Law, ratified on 20/06/2002 (11) and 26/06/2002 (1) 12 ordinary Royal decrees Series 2: July 13, 2001 (1 dated June 14, 2001): 10 Royal decrees/Law, ratified on 26/06/2002 10 ordinary Royal decrees Series 3: December 4, 2001 25 ordinary Royal decrees with respect to provisions public servants, wages and remuneration Series 4: December 11, 2001 6 Royal decrees/Law, ratified on 26/06/2002 8 ordinary Royal decrees 14

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Conversion of amounts – results 16 decrees only for the department of Finance All dated December 18, 2001 Conversion of existing ministerial decrees 15

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Acceptance Principle: to the BENEFIT of the taxpayer Exception : fines and penalty clauses Budgetary cost price ! 35. 000 EUR Conversion laws and decrees contains only changes relating to the euro conversion; no hidden changes relating to other reasons or decisions Euro starter kits: benefits exemption of taxation 16

Federal Public Service FINANCE TAXES AND TAX COLLECTION Administration of Fiscal Affairs Success factors for the conversion Timing: start in time Common approach (= for all ministries) Establish uniform conversion rules Uniformity – coherent and clear notation Clear communication Acceptance by all parties concerned : conversion should be positive, also in regulation 17