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Macroeconomic and fiscal impact of the risk capital allowance

Author

Listed:
  • K. Burggraeve

    (National Bank of Belgium, Research Department)

  • Ph. Jeanfils

    (National Bank of Belgium, Research Department)

  • K. Van Cauter

    (National Bank of Belgium, Research Department)

  • L. Van Meensel

    (National Bank of Belgium, Research Department)

Abstract

The study, produced in response to a request made by the federal government, examines the economic impact of the risk capital allowance. More particularly, it assesses the extent to which the objectives of the law of 22 June 2005 introducing an allowance for risk capital in the Belgian corporation tax system have been achieved. The study gives a brief presentation of the measures introduced by this law. It analyses the influence of these measures on the financial structure of corporations, their effect on the Belgian coordination centres – whose beneficial tax regime will soon be abolished – and their macroeconomic impact particularly investment and employment. Their budgetary implications on the basis of both macroeconomic and microeconomic data is then examined.

Suggested Citation

  • K. Burggraeve & Ph. Jeanfils & K. Van Cauter & L. Van Meensel, 2008. "Macroeconomic and fiscal impact of the risk capital allowance," Economic Review, National Bank of Belgium, issue iii, pages 7-47, September.
    • Handle: RePEc:nbb:ecrart:y:2008:m:september:i:iii:p:7-47
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    File URL: https://www.nbb.be/en/articles/macroeconomic-and-fiscal-impact-risk-capital-allowance-1
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    Citations

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    Cited by:

    1. Dave Goyvaerts & Annelies Roggeman, 2020. "The Impact of Thin Capitalization Rules on Subsidiary Financing: Evidence from Belgium," De Economist, Springer, vol. 168(1), pages 23-51, March.
    2. Ch. Piette & M.-D. Zachary, 2016. "Internal resources, bank credit and other funding sources : what are the alternatives for businesses in Belgium?," Economic Review, National Bank of Belgium, issue i, pages 63-83, June.
    3. C. Duprez & Ch. Van Nieuwenhuyze, 2016. "Belgium’s inward and outward foreign direct investment," Economic Review, National Bank of Belgium, issue ii, pages 45-62, september.
    4. F. De Sloover & Y. Saks, 2018. "Is job polarisation accompanied by wage polarisation?," Economic Review, National Bank of Belgium, issue iii, pages 79-90, september.
    5. Kayis-Kumar, Ann, 2015. "Thin capitalisation rules: A second-best solution to the cross-border debt bias?," MPRA Paper 72031, University Library of Munich, Germany.
    6. Geert Campenhout & Tom Caneghem, 2013. "How did the notional interest deduction affect Belgian SMEs’ capital structure?," Small Business Economics, Springer, vol. 40(2), pages 351-373, February.
    7. Ch. Piette & M.-D. Zachary, 2016. "Internal resources, bank credit and other funding sources : what are the alternatives for businesses in Belgium?," Economic Review, National Bank of Belgium, issue i, pages 63-83, June.

    More about this item

    Keywords

    corporation tax in Belgium; tax allowance; risk capital; coordination centres;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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