Starting your Own Business Local Knowledge 23 April 2013 Christopher Thubron Steven Degraef Moore Stephens, Brussels www.moorestephensbrussels.com

Your contacts Christopher Thubron - Partner Steven Degraef Tel 02 – 639 45 45 Email christopher.thubron@moorestephensbrussels.com Steven Degraef Tel 02 – 639 45 34 Email steven.degraef@moorestephensbrussels.com Moore Stephens FS Blue Tower Avenue Louise 326 – Box 30 1050 Brussels

The financial part – The FIRST decision Running your business The financial part – The FIRST decision Company or individual Similar approach You need an accountant

Why do you need an Accountant ? Comply with the laws Bookkeeping VAT Tax return Social security Cheaper than DIY ???

Choosing an accountant Interview 2 or 3 Working for you Difference between accountant and auditor Tax adviser

Questions to ask before appointing an accountant 1/3 Status Member of an Institute in Belgium Experience in general and internationally Communication – understanding as well as language Build a relationship Insurance to cover for advice given Quality control reviews Fees – if fixed – how is extra work charged

Questions to ask before appointing an accountant 2/3 Staff Language ability Communication – languages may be OK but understanding may not be US and UK « separated by the same language » GB Shaw Accountant should confirm instructions (Calls, Meetings,etc) by email Make sure you understand the replies to your questions Help you to understand what and why Be sceptical of promises Identify staff working on file – replacement for holidays, etc

Questions to ask before appointing an accountant 3/3 The one or two persons firm is finished Subject too wide New laws and rules almost weekly IEC discourage loneliness, encourage mergers May be cheaper but may not be complete

Fees – rates – fixed quote – how is additional / extra work handled Terms – Fees Fees – rates – fixed quote – how is additional / extra work handled Engagement letter – what is included – what is extra – must be clear

Time is money but make sure there is time for you Don’t waste time Be efficient – prepare list of questions before meeting / call

How will you work together ? Accountant collects documents or You take documents to accountant or Input by accountant at your place or You do input from your office / home via link to accountant’s programme Deadlines – fines if missed

Filing organised – accountant must show how to do – no shoeboxes What do you have to do ? Filing organised – accountant must show how to do – no shoeboxes Attach written explanations to documents where not clear from document Provide spreadsheet if possible Be ready on time – agree deadlines

Separate bank accounts Schizophrenic Clarity Manage your cash VERY IMPORTANT Separate bank accounts Schizophrenic Clarity

Layout – what do you need to know ? Frequency Currency Financial reports Layout – what do you need to know ? Frequency Currency

Exchange of information Tax returns Belgian Elsewhere in the world Exchange of information

Rights and duties of tax payer and adviser Data mining Controls Tax VAT Social Security Preparation Rights and duties of tax payer and adviser Data mining

UK or other foreign companies Handle with care Permanent establishment Economic centre of activity

- Tax, VAT, Social Security and other important matters Steven Degraef - Tax, VAT, Social Security and other important matters

Two systems exist in Belgium Deductions Two systems exist in Belgium A lump sum (a variable percentage of income) Actual charges (unlimited if substantiated)

The lump sum system : Deductions Income after social security Lump Sum Allowance per tranche Total Allowance 0 - 5.650 5.650 - 11.220 11.220 - 18.670 18.670 - 63.635 63.635 - …… 28.7 % 10 % 5 % 3 % 0 % 0,00 1.621,55 2.178,55 2.551,05 3.900,00 3.900,00 (MAX)

The actual charges require accounting of all expense invoices Deductions The actual charges require accounting of all expense invoices Conditions Related to professional activity proven by supporting documents Payment proven – possibility for forfait Made to earn or to maintain taxable income

Social Security Calculation of professional income: Gross income Less Social security (amount actually paid !) Including Pension Libre complémentaire Income after social security Actual expenses Or lump sum allowance Taxable income before allowances

Limited to 75% of the amount Car Car costs: Petrol Parking Maintenance Taxi Limited to 75% of the amount

Depreciation on assets IT equipment PC = 3 years Car = 5 years Other assets Depreciation on assets IT equipment PC = 3 years Car = 5 years Furniture

Heating, utilities (professional part) Telephone, mobile phone, post

If allowed in rent contract Deductible for tax If allowed in rent contract

Examples of other actual expenses Training, seminars Professional travel office suppliers, IT supplies documentation Professional insurances Restaurant : deductible for 69% Representation costs : deductible for 50% Professional clothing: can only be worn at the work place Bank charges Local taxes

Examples of non deductible expenses Taxes Fines (other than parking fines) Non professional clothing : which can also be worn outside of the work place Non professional expenses

Questions?

Your contacts Christopher Thubron - Partner Steven Degraef Tel 02 – 639 45 45 Email christopher.thubron@moorestephensbrussels.com Steven Degraef Tel 02 – 639 45 34 Email steven.degraef@moorestephensbrussels.com Moore Stephens FS Blue Tower Avenue Louise 326 – Box 30 1050 Brussels Disclaimer These slides are for information to support the presentation on 23 April 2013 and do not constitute advice. Appropriate specific advice must be taken before taking any action.