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Press Release: AWDC Addresses New Tax System in Belgium

Mar 30, 2015 2:27 PM   By AWDC
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Press Release: The Antwerp World Diamond Centre (AWDC) has taken note of the government decision to introduce a tax system that is calculated on a lump-sum basis. “Diamantaires are willing to pay higher taxes in exchange for financial predictability and legal certainty,” said Ari Epstein, the CEO of the AWDC.

Under the new tax system, diamantaires would be taxed according to a fixed percentage of the turnover, for profit and losses, rather than on a percentage of the profit. While the introduction of this tax will mean that diamond traders will pay higher taxes than they do currently, the introduction of this tax will ensure the requisite stability and legal certainty. The diamond industry has been under pressure globally since the banking crisis occurred, as the availability of financing has declined drastically.

Fiscal predictability decisive

The international diamond trade is a highly competitive affair. As the oldest and most transparent trade center in the world, Antwerp has to compete with rivals in Dubai, India, Israel and Hong Kong. While these trade centers, like Antwerp, specialize in the diamond trade, the conditions under which they operate are entirely different.

The uncertain and often non-competitive fiscal environment is responsible for the fact that diamond traders often see no reason to realize their turnover and profit in Belgium. This is not good for Belgium's government, which loses out on revenue, nor is it beneficial for Antwerp as a trade center, as it is threatened with losing its leading position as a competitive center.

Epstein said, “Because the new system is a tax on turnover instead of profit, diamond traders know precisely what to expect when they close their financial year.”

Long-term foothold crucial

The continued existence of Antwerp as a diamond trade center largely depends on the extent to which companies can establish a long-term foothold here. While diamantaires will pay higher taxes as a result of the introduction of a tax system calculated on a lump sum basis, the legal certainty will ensure that it will be more interesting to once again realize their increased turnover and profit in Belgium. In this way, diamond traders will also obtain easier access to financing, which is crucial for the financial viability of their companies.

Epstein stated,  “Given the difficult budgetary situation, we understand that the government requires additional efforts from every industry. As a representative organization, we will try to defend this position to our members in exchange for legal certainty and a stable fiscal environment.”

AWDC, Antwerp World Diamond Centre, is an industry-established foundation, whose mission is to serve and support the diamond business in Antwerp, the world's most important diamond trade hub. AWDC is the coordinating body and the official representative of the Antwerp diamond sector, and as such is recognized internationally as the host, spokesperson and intermediary for the Belgian diamond community. In this capacity, AWDC liaises on behalf of the Belgian diamond sector with governments and actively promotes support for the diamond sector at home and abroad. Eight-four percent of all rough diamonds and 50 percent of all polished diamonds pass through Antwerp. Diamonds represent 5 percent of the total Belgian exports and 15 percent of all Belgian exports outside the E.U., making diamonds the most important export product outside the E.U.

Rapaport News is not responsible for, and does not endorse, the content of any third-party press release. This is not a Rapaport Press Release. It has been provided as additional information for our clients. 

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Tags: Antwerp, AWDC, Belgium, diamonds, security, taxes, trading
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