A partnership is a popular tool in estate and succession planning. It can ensure That as a donor you can transfer your assets without, however, completely relinquishing control of them. Since 2018, every partnership is labeled a company, which means it must be registered in the Crossroads Bank for Enterprises and consequently receive a company number. And of course, whoever says enterprise also says municipal tax. But is it actually owed by the partnership?
Like individuals, businesses are also subject to municipal taxes. Every year, companies receive an assessment notice where the municipal tax is usually calculated based on the area of the respective establishment. In 2018, corporate law was thoroughly reformed where, among other things, the distinction between civil and commercial partnerships was eliminated and the partnership, just like the bv and nv, had to be considered an enterprise.
Thus, since then, partnerships have also been sent an assessment notice to pay municipal tax since they are considered to be an enterprise. In practice, however, not every partnership will be obliged to pay the municipal tax, as it is only payable by companies that carry out an economic activity. Thus, partnerships established purely in the context of estate and inheritance planning are not subject to this municipal tax.
If you are a shareholder/business owner of the partnership and you receive a municipal tax notice or an assessment is immediately established, be sure to check that it is due.
The exact conditions and modalities of this tax vary from one municipality to another, so the municipal regulations in question must be checked for each case. We anticipate that in many municipalities there will be an administrative error - linked to the fact that there is a registration in the CBE - which means that the tax is not actually due. The fact is that a partnership established in the context of family planning and thus having a civil purpose or object does not carry out an economic activity in the strict sense of the word.
If your partnership receives a municipal tax notice or an assessment is immediately established, check the municipal regulations of the relevant municipality. If the municipal regulations reveal that the partnership is actually covered by an exemption, then either respond to the letter this way or object to the wrongfully established municipal tax.
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