Increased tax surcharge to 9%: importance of advance payments in 2024

It is crucial for your company to make advance payments throughout the year on the final tax due. Failure to make these payments, or making insufficient advance payments, may result in a tax surcharge imposed by the tax authorities. For the 2025 tax year, this surcharge amounts to 9%, a significant increase compared to previous years. Therefore, it is essential to closely monitor deadlines and take timely action.

Advance payments

To avoid a tax surcharge, it is necessary to make advance payments. These payments provide a reduction of the tax surcharge, depending on the timing of the payments.

If your company’s fiscal year coincides with the 2024 calendar year, the following deadlines apply for advance payments:

• Advance payment 1: no later than April 10, 2024
• Advance payment 2: no later than July 10, 2024
• Advance payment 3: no later than October 10, 2024
• Advance payment 4: no later than December 20, 2024

For companies with a non-calendar fiscal year, these dates do not apply. Instead, advance payments must be made by the tenth day of the fourth, seventh, and tenth months, and by the twentieth day of the final month of the fiscal year.

Each advance payment provides a benefit that is deducted from the 9% tax surcharge. This benefit decreases as the fiscal year progresses. The benefits for advance payments are as follows:

• Advance payment 1: 12%
• Advance payment 2: 10%
• Advance payment 3: 8%
• Advance payment 4: 6%

The first advance payment, due by April 10, 2024, is the most beneficial. In principle, an advance payment of 75% of the total corporate tax due is sufficient to avoid any surcharge. It is important to note that from the third advance payment onward, the benefit is lower than the 9% surcharge. Therefore, it is advisable to make the majority of advance payments in the first two installments.

For example, if the tax payable amounts to EUR 20,000 and no advance payment has been made, the tax authorities will apply a surcharge of 9%, resulting in an increase of EUR 1,800.

If an advance payment of EUR 15,000 was made in the first quarter, the surcharge can be reduced by EUR 15,000 x 12%, or EUR 1,800. Note that in corporate taxation, no bonus is granted for making advance payments.

Exceptions to the tax surcharge

10% tax on liquidation reserve

If you choose to allocate your company’s profits (after corporate tax) to a so-called “liquidation reserve,” an additional corporate tax of 10% applies. This extra tax does not affect the tax surcharge.

Exemption for new companies

Newly established companies are exempt from advance payments and the related tax surcharge for their first three fiscal years.

Tax shelter as an alternative to advance payments

Your company may also consider investing in a tax shelter. This fiscal scheme encourages the production of audiovisual works, such as films and series, as well as performing arts productions. A properly calculated tax shelter investment lowers the taxable base, reducing your company’s tax liability. In addition to the tax benefit, such an investment also provides a financial return in the form of interest.

Our PKF BOFIDI experts are here to help

It is essential to make timely and sufficient advance payments in 2024 to avoid the 9% tax surcharge. If you need assistance in determining your advance payments, feel free to contact your advisor. Interested in a tax shelter as a possible investment? Our experts are ready to assist you!

This article was written by Bavo Blauwens, Pieter Blijweert, and Claudia Cuyvers.