Antwerp: The Belgian Parliament has officially adopted the ‘Diamond Regime’, commonly known as the ‘Carat Tax’, as the new fiscal system for the Antwerp diamond industry.
The new system stipulates that companies will no longer be taxed on the basis of their profit but on a fixed percentage of their turnover – thereby eliminating complicated discussions with tax authorities about the value of inventory, which is difficult to assess. “At long last,” writes the Antwerp World Diamond Centre (AWDC), “predictability and stability have arrived in the Antwerp diamond industry in the form of the new tax regime for all registered diamond companies.
The Belgian Parliament has adopted the new regime, enshrined in law by the Belgian Federal Government, which will be applicable to all registered diamond traders as from tax year 2017 (income year 2016).”
The AWDC is confident that the adoption of the ‘Carat Tax’ will give a new impetus to the Antwerp diamond industry and will attract new companies to the diamond capital, or encourage those that had left to return.
“Diamond traders have been asking for a transparent and stable fiscal climate,” says AWDC spokeswoman Margaux Donckier. “Legal certainty is an essential component to doing business. We consult our stakeholders regularly. From these discussions it was clear that they are prepared to return to Antwerp and reestablish a company once a more predictable system is in place.
According to our calculations, our turnover will increase 10 – 15% once the Carat Tax is implemented.” The governmental decision appears to have removed any remaining barriers to companies staying in or returning to Antwerp.