Date de publication : 06-10-1907
The following information are for the sole purpose of providing a general overview of the local taxation of the Corporate tax aspects of the country. In any case, the information provided below cannot be considered as comprehensive or deemed to constitute specific legal advice.
Yes we tax in Belgium
New tax reform: No specific information
New tax treaties:
- Tax treaty between Belgium and Mexico enters into force.
- Tax treaty between Belgium and Uruguay enters into force.
Local tax advisors
No specific information on the local tax advisors.
The domestic definition of Permanent Establishment follows the wording of article 5 of the OECD Model:
- Dependent agent who habitually concludes contracts in the name of a non-resident company (except if the activity is limited to purchase of goods);
- Fixed place of business, building site, construction, assembly or installation and any related supervisory activity, for a period of 30 days.
Resident companies are taxed on their worldwide income (« worldwide principle »).
Entities are considered to be resident for tax purposes in Belgium if their legal place of incorporation, or if their place of management & control, is in Belgium.
Note: the definitions of permanent establishment and place of residence are subject to the relevant provisions of any applicable double tax treaty, if any.
Corporate Income Tax
The general CIT tax rate is 33% (effective tax rate is 33.99%).
Small companies (taxable income less than around 322kEUR) are taxed under a reduced progressive tax rate.
Non-taxable income includes the following:
- Dividends benefiting from the participation exemption (95% exempt);
- Certain capital gains deriving from qualifying participations ;
Non-deductible expenses includes the following:
- Dividends benefiting from the participation exemption ;
- Interest in excess of the thin-capitalization threshold ;
Carry forward: Yes, but some restrictions may apply.
Carry back: No
Companies should submit the tax return annually before the 30th June of the following year.
Whithholding Taxes (payment to foreign companies)
The local tax rates in Belgium are the following, subject to the provisions of an applicable double tax treaty, if any.
There is no WHT on the profits paid from a branch to its foreign head office.
The general rate of WHT on dividends is 30% of the gross amount.
The general rate of WHT on interest is 30%.
The general rate of WHT on Royalties is 30%.
The general rate of WHT on management fees is 0%.
The general rate of WHT on technical services is 0%.
Generally, capital gains are taxed under the regular CIT as general income.
Note: capital gains deriving from qualifying participations are exempt under the participation exemption.
Standard VAT tax rate is 21%
Reduced tax rates are:
- 12% (among others, restaurant, construction, …);
- 6% (among others, basic necessities, newspapers, passenger transport, …)
Zero-rated supplies include, subject to certain conditions:
- exports of goods;
- intra-Community supplies of goods;
Exempt supplies include, subject to certain conditions:
- Certain financial services
- Certain insurance services
- Training and education
Note: exempt transactions differ from zero-rated transactions in that the input VAT associated with exempt transactions is not deductible.
EU taxable companies may claim a VAT refund to their own tax authorities through on the basis of the 13th EU Directive.
In case where for a tax period, Input VAT exceeds Output VAT, certain non-resident companies (which are not required to register and incur Belgium-VAT in the course of their business activities in Belgium) may apply for a refund.
No other specific information of VAT in Belgium.
The general statute of limitation is 3 years.
The statute of limitation could be extended to 7 years for negligent tax fraud and for wilful tax fraud.
There is no foreign exchange control in Belgium. Income and capital could be freely repatriated.
There are thin capitalization rules in Belgium. The interest derived from loans between related parties may not be deductible in case where interest exceeds some ratios (5 times the taxpayer’s net equity).
Furthermore, the interest rate must not exceed the market rate.
Do not hesitate to share your experience in Belgium with us in the comments below. Any comments are welcome !