Belgian Parliament Approves 'Carat Tax' For Diamond Trade

(IDEX Online) – The so-called 'Carat Tax' was endorsed this week by the Belgian parliament, allowing it to come into effect for all official diamond traders in the 2017 tax year applying to income generated this year.

The 'Diamond Regime' means that diamond firms will not pay tax on profits, but rather a fixed percentage of turnover.

Although diamantaires are likely to pay more tax overall, the advantage of the regime is that it makes the amounts of tax they will pay more predictable. That will also bring an end to complex discussions and uncertainty regarding tax bills.

The new arrangement may also have the effect of persuading financiers to provide credit to diamond companies, according to the Antwerp World Diamond Centre (AWDC).

"Diamond traders have been asking for a transparent and stable fiscal climate," said AWDC spokeswoman Margaux Donckier as cited by thediaondloupe.com. "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."