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  • Create a company in Belgian » Taxes

    a. Direct taxes

    Personal income tax

    Resident individuals are subject to personal income tax on their worldwide income which is computed by adding up all types of income, e.g. business and employment income and real property income.

    Corporate income tax

    Legally established companies and other profit-making organizations with legal personality which have their registered office, their main business centre or their seat of management in Belgium are subject to Belgian corporate income tax on their worldwide profits. If the Belgian company also receives profits of income from a foreign branch, this income may be exempt from tax if the branch is located in a country that has a double taxation treaty with Belgium. Foreign companies can be subject to corporate income tax if they are carrying out business activities in Belgium through a branch.
    The standard Belgian corporate income tax rate amounts to 33.99%. A reduced progressive tax rate applies for companies which have a taxable profit not exceeding € 322,500.

    b. Indirect taxes

    VAT (Value Added Tax)

    VAT is a tax on goods and services. The standard rate is 21%, but a number of goods and services are taxed at 6% or 12%.

    Persons liable with VAT must file a monthly VAT return. Small enterprises may opt for a quarterly return.

    Registration duties

    These are paid when a deed or written document is registered. There are three types of registration duties: proportional duties, specific fixed duties and the general fixed duty.

    The proportional registration duties amount in each case to a percentage of the tax base:
    • sale of real estate: 12.5%
    • capital increase of Belgian companies: 0.5%
    • mortgage on real estate: 1%
    • lease of real estate: 0.2%
    c. Tax and other incentives

    Hong Kong Belgium Double Taxation Agreement

    This agreement was concluded upon in order to avoid double taxation and to prevent fiscal evasion with respect to taxes on income and capital. Under this treaty, companies based in Belgium will, under certain conditions, be able to repatriate dividends, interest and royalties at a zero or low rate of withholding tax.

    The treaty states that a company which is a resident in Hong Kong and, which at the moment of the payment of the dividends, holds, for an uninterrupted period of at least 12 months, shares representing directly at least 25 % of the capital of the Belgian company paying the dividends will be exempted from withholding tax. This compares to a dividend withholding tax rate of around 25 % in many other countries.

    The existing taxes to which the Agreement shall apply are:
    • in the Hong Kong Special Administrative Region :

      1. profits tax
      2. salaries tax
      3. property tax

    • in Belgium :

      1. the individual income tax
      2. the corporate income tax
      3. the income tax on legal entities
      4. the income tax on non-residents
      5. the supplementary crisis contribution
    The new benefits are:
    • Withholding tax on dividends:

      1. is 0% for a company based in Hong Kong that holds at least 25% of the capital of the Belgian company that pays the dividends for an uninterrupted period of 12 months.
      2. is 10% if the company holds at least 10% of the capital of the Belgian company that pays the dividends.
      3. is 15% if the company holds 5% of the capital of the Belgian company that pays the dividends.

    • Withholding tax on interest:

      1. The following interests are rated at 0%: interest on commercial debt claims, including debt claims represented by commercial paper, resulting from deferred payment for goods, merchandise or services supplied by an enterprise; interest on debt claims or loans of any nature paid to banking enterprises; interest on certain loans related to the Hong Kong or Belgian government.
      2. All other interests are rated at 10%. However, Belgian domestic rules foresee a 0% tax if certain conditions are fulfilled.

    • Withholding tax on royalties shall not exceed 5%
    Investors can obtain certainty about their future tax liabilities by requesting an advanced agreement (ruling) from the Belgian tax authorities.

    The Notional Interest Deduction

    The Notional Interest Deduction aims to improve the investment climate in Belgium. This tax innovation grants both Belgian companies and foreign companies with a Belgian branch a deduction on the yearly taxable income equal to a %age of the capital at risk. All companies subject to corporate tax and personal or corporate non-resident tax are granted a deduction on the yearly taxable income, equal to the total capital at risk, multiplied by the interest rate for long-term linear loans

    Other incentives
    • The Belgian government agreed on a new tax measure aimed at foreign companies which exempts them from paying dividend withholding tax paid to foreign parent companies.

    • Each region in Belgium has the power to grant financial contributions to encourage enterprises. The Brussels-Capital Region offers several incentives. We have listed the most important ones below.
      1. Subsidies can be applied for, among other things, for the following investments: investments in land and buildings, investments in equipment and furniture and for intangible investments
      2. Companies can receive subsidies for their R&D activities from the Brussels-Capital Region.
      3. Under certain conditions, SMEs can obtain financial incentives to help them pay for business trips, to take part in international trade fairs, to produce export promotion materials, to appeal to foreign trade consultants and send their staff on foreign trade training courses,…
      4. An enterprise can also obtain a contribution for training activities organised for the staff or management of the enterprise. The contribution from the Region amounts to 50% of the price, with a maximum of € 6,200 per training activity.
      5. Enterprises that wish for their staff to take language courses (the choice of teaching institution is free) can receive a subsidy amounting to 50% of the costs, excluding incidentals (accommodation, travel, etc.). Support available is limited to € 6,200.
      6. In order to help identify the measures which apply specifically to your enterprise, the Brussels Enterprise Agency has developed EcoSubsiBru, a database for enterprises located in the Brussels-Capital Region. This interactive site gives information on financial grants for which you may be eligible.

    • Expatriates
      Belgium has a special tax regime applicable to foreigners who are assigned to Belgium to work for a Belgian company that has an international character or is a part of an international group.

      In order to be recognised as an “expatriate” you must have a foreign nationality, an executive status (special knowledge and responsibility) and your employment in Belgium must be temporary

      The special tax regime for expatriates offers significant benefits:
      1. Foreign executives with a temporary assignment will, for Belgian tax purposes, qualify as non-residents. This means that the expatriate will only be taxable on the income related to the activities in Belgium.
      2. The employee is not taxable, within certain limitations, on the reimbursements of expenses incurred by him as a result of his temporary stay in Belgium. These costs are considered as expenses that are attributable to the employer, and consequently not taxable on behalf of the employee.
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