Belgium Puts Corporate Tax Rate Under Review as Conflict Lingers

(Bloomberg) -- Belgium’s government averted a political crisis by relegating plans to cut the tax rate on corporate profits and calls for a capital gains levy to further review as the conflict threatened to derail a last-minute budget deal.

“You can’t let things like this depend on the outcome of a deal struck in early hours,” said Deputy Prime Minister Alexander De Croo on Flemish public broadcaster VRT. “That’s why we decided to give ourselves more time and take a closer look at the impact on corporate financing and job creation.”

Prime Minister Charles Michel canceled an appointment last Tuesday to present the 2017 budget and measures to accommodate private-sector job creation in parliament in Brussels. Talks between the four coalition parties had stalled over Flemish Christian Democrats’ demands for the introduction of a capital gains tax on stock investments. De Croo spoke as he left Michel’s office shortly before midnight. Under European Union rules, Belgium must submit its draft budget by Oct. 15.

Michel will give details about the 2017 budget at a briefing shortly after 11 a.m. on Saturday. According to De Croo, the political agreement amounts to a 3 billion-euro ($3.3 billion) effort, keeping the government’s target of a structurally balanced budget in 2018 within reach.

To contact the editor responsible for this story: John Martens at jmartens1@bloomberg.net.