Doing Business in Belgium - RSM International

4. Taxation
4.1. Overview of Belgian tax system
The Belgian tax system can be divided into four main categories of taxes levied at
the national level:
• Income taxes (personal income tax for residents of Belgium and non-residents who
have sources of income within Belgium; corporate income tax for both resident
and non residents companies);
• Value added tax - VAT;
• Registration taxes;
• Customs and excise duties.
At the regional and local level various forms of taxes are levied. Inheritance tax is an
example of a regional tax.
4.2. Corporate income tax
4.2.1. Introduction and persons liable for tax
Belgium has a corporate income tax system for resident companies and non-resident
companies having a fixed establishment in Belgium.
A company is Belgian resident if the registered office or the principle place of
business is in Belgium. The company is also resident if the main place of effective
management is located in Belgium.
A company’s taxable period is equal to its accounting year. For companies closing
their accounts on December 31, the tax year is the following year (e.g. for the financial
year per December 31, 2010, the tax year is 2011). For companies closing on another
date, the tax year and the taxable period are equal (e.g. for the financial year per
June 30, 2010, the tax year is 2010).
4.2.2. Tax assessment basis
In principle the taxable basis is calculated on the basis of normal accounting rules,
unless there are any specific exceptions foreseen in tax law. The basic rule is that
a company’s taxable income consists of any increase in its total value as shown
by the difference in the balance sheet between the beginning and the end of the
financial year (without taking into account capital increases carried out during the
financial year).
The net taxable income is divided into three main categories of taxable income:
retained earnings, certain non-deductible expenses and dividends. The following
adjustments must be made when calculating the net taxable income:
• Determination of the fiscal profits or losses;
• Break-down of the tax profits or losses according to their source
(Belgian or foreign);
• Deduction of income which is exempt under DTA and certain other deductions;
• Deduction for “Participation Exemption” and for exempted movable income;
• Deduction for patent income;
• Allowance for corporate equity (= the notional interest deduction);
• Deduction of previous losses;
• Investment deduction.
The net taxable profit thus calculated is in principle taxed globally. The basic rate of
corporate income amounts to 33.99% (= 33% + temporary crisis surcharge of 3%).
When profit is lower than 322,500 euro, companies can benefit from reduced tax
rates if the following conditions are met:
• At least 50% of the shares must be hold by natural persons;
• The value of participations in other companies may not exceed 50% of the paid-up
capital increased by the taxed reserves and the accounting capital gains (except
for participations representing at least 75% of shares);
• The company must attribute to at least one director of the company a remuneration
of at least 36,000 euro (or at least the amount of the taxable income if this is less
than 36,000 euro);
• The paid dividends may not exceed 13% of the company’s equity;
• Not being member of a group which owns a “coordination centre” in Belgium.
Resident companies are subject to corporate income tax on their worldwide profits
(even those undistributed).
Foreign companies having a branch (permanent establishment) in Belgium are also
subject to corporate income tax on their Belgian-source profits.
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DOING BUSINESS IN BELGIUM
DOING BUSINESS IN BELGIUM
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