Decisions of the Council of State dated June 17, 2024

The Council of State issued several rulings yesterday concerning, in particular, payroll tax and income tax:

- With regard to payroll tax, it holds that debt write-offs need not be included in the revenue used to determine tax liability: Council of State, 8th and 3rd Chambers, June 17, 2024, No. 474155, Cited in the tables

- With regard to the treatment of transfer taxes paid by the donor in determining the capital gain on the sale of the securities that are the subject of the gift, the Council of State clarifies that such taxes cannot reduce the amount of the capital gain when the donee sells the securities, since the donee has not paid those taxes. The Council also reiterates its general principle regarding the taxation of capital gains on the sale of split-title securities when the bare owner and the usufructuary jointly decide on such a sale:
(i) in principle, the capital gains tax is apportioned between the usufructuary and the bare owner;
(ii) This is not the case when the parties decide to reinvest the sale proceeds in the acquisition of other securities that accrue to the usufructuary. In this case, the capital gain is taxable in the name of the bare owner.
CE, 8th and 3rd Ch., June 17, 2024, No. 488488, Cited in the tables