Corporate tax in Belgium

Summary

Corporate Income Tax Rate (%) 33 (a) (b)
Capital Gains Tax Rate (%) 0.4 / 25 / 33 (b) (c)
Branch Tax Rate (%) 33 (b)
Fairness Tax Rate (%) 5 (a) (b)
Withholding Tax (%)
Dividends 5 / 10 / 15 / 17 / 20 / 27 (d)
Interest 15 / 27 (e)
Royalties from Patents, Know-how, etc. 25
Branch Remittance Tax 0
Net Operating Losses (years)
Carryback 0
Carryforward Unlimited (f)

a) For further details, see Section B.

b) In addition, a 3% surtax (crisis contribution) is imposed.

c) Certain capital gains are exempt from tax (see Section B).

d) The standard withholding tax rate for dividends is 27%, effective from 1 Jan­uary 2016. For further details, see Section B.

e) The standard withholding tax rate for interest is 27%, effective from 1 Janu­ary 2016.

f) For further details, see Section C.

Taxes on corporate income and gains

Corporate income tax. Resident companies are subject to tax on their annual worldwide income. Nonresident companies are sub­ject to tax on their annual Belgian-source income only. A company is resident in Belgium if its central management or its registered address is located in Belgium.

Rates of corporate income tax. The normal corporate income tax rate is 33% for both resident companies and branches. If the income of a company or a branch is below EUR322,500, it is taxed at rates ranging from 24.25% to 34.5%. The reduced rates apply only if the company pays annual remuneration of at least EUR36,000 to at least one director. The reduced rates also do not apply to a company if any of the following circumstances exist:

  • The company is a holding company.
  • 50% or more of the company is owned by another company.
  • The company makes a dividend distribution exceeding 13% of the paid-in capital.

In addition to the applicable rates, a 3% surtax (crisis contribu­tion) is levied.

Notional interest deduction. Belgian companies and foreign com­panies with a Belgian permanent establishment or real estate in Belgium may benefit from a tax deduction equal to a percentage of the “risk capital.” This notional interest deduction (NID) is not reflected in the financial accounts. The “risk capital” equals the total equity, including retained earnings, as reported in the non-consolidated closing balance sheet of the financial year preced­ing the tax year (upward or downward adjustments of the risk capital are taken into account on a pro rata basis). To avoid poten­tial abuse and duplication of tax benefits, the following items must be deducted from the equity:

  • The fiscal net value of own shares and other shares recorded as financial fixed assets
  • The fiscal net value of shares, the income from which is eligible for the Belgian participation exemption
  • The net book value of tangible fixed assets to the extent that costs relating to such assets unreasonably exceed the needs of the business
  • The book value of tangible fixed assets that are held as a port­folio investment and that are by their nature not intended to generate periodic income
  • The book value of real estate assets or other real property rights used by directors, their spouses or children
  • The tax-exempt portion of revaluation gains, capital subsidies and tax credits for research and development (R&D)

Equity allocated to foreign branches and foreign real estate quali­fies for the NID. However, in such case, this portion of the NID must be imputed first on that foreign-source income. Only excess NID relating to branches and real estate located in the European Economic Area (EEA) can be effectively used against Belgian taxable income.

The tax deduction is computed by multiplying the risk capital by the average interest rate on risk-free, long-term Belgian state bonds (the 10-year obligations linéaires – lineaire obligaties, or OLO) during the third quarter.

The average OLO rate in the third quarter of 2014 was 1.562%, and the rate in the third quarter of 2015 was 1.131%. For the 2016 tax year, the rates are 1.630% for large companies and 2.130% for small companies. For the 2017 tax year, the NID rate is set at 1.131% (1.631% for small companies). The maximum notional interest deduction rate is capped at 3% (3.5% for small compa­nies) if the above calculation method would result in a higher percentage. The deduction may not be carried forward in the event of a loss.

Tax regime for the diamond industry. Belgian tax law provides for a special lump-sum tax regime for the diamond industry (Dia­mond Regime). The lump-sum taxable result equals 0.55% of the diamond trade turnover, plus the positive difference between a “reference salary” and the highest company manager’s salary paid during the tax period.

This taxable result is subsequently subject to the application of the common corporate tax rules. Companies or Belgian perma­nent establishments subject to the Diamond Regime cannot apply the NID and the carried forward NID. Unless it is proven that prior losses originate from activities other than the diamond trade, the deduction of tax losses is excluded from the Diamond Regime.

The regime applies only to registered diamond traders and brokers.

To obtain clearance under EU state aid rules, the Diamond Re gime will be notified to the European Commission, but it is expect ed to be effective from the 2016 tax year (financial years ending between and including 31 December 2015 and 30 December 2016).

Tax incentive for audiovisual investments. Since 2003, Belgian tax law includes a tax incentive to attract investments of Belgian companies or branches in audiovisual productions.

Framework agreements concluded after 31 December 2014 are subject to a new legal regime, under which investors may deduct 310% of their investment from their tax base. Therefore, the investor can recover 105.37% (310% x 33.99%) of the investment directly through a reduction of its corporaste income tax. As a result, the new tax incentive provides for an immediate, but con­ditional, return of the invested amount increased by a fixed mar­gin of 5.37%.

The new incentive requires a tax-shelter certificate issued by the tax authorities, which is to be requested by the production com­pany as soon as the production is finalized. The certificate pro­vides the following:

  • It guarantees that the invested amounts flow to the production company to a maximum extent.
  • It confirms that the production company complies with all legal conditions.
  • It guarantees the tax exemption on behalf of the investor.
  • It determines the “tax value” of the project.

Companies planning to invest in a European audiovisual produc­tion (to be recognized by the competent departments of the French, Flemish or German communities) and who want to benefit from the tax incentive must conclude a framework agreement with a qualifying audiovisual production company (possibly through intervention of a qualifying intermediary or commissioner). In this framework agreement, the expected tax value for the produc­tion, which is based on the budgeted production expenses, needs to be included. The estimated tax exemption is based on this tax value. The framework agreement needs to be notified to the tax authorities within one month after it is signed.

The investors are entitled to an exemption of 310% of the invest­ed funds. The invested amounts do not create a receivable, nor exploitation rights linked to the underlying project. The invested amount is irrevocably paid to the production company (as an expense; the expense as such is not tax deductible) and is not regarded as an asset. Except for commercial gifts with limited value (under reference of value-added tax [VAT] legislation), no other economic or financial benefit can be granted to the investor.

However, the exemption in a given tax year remains limited to a maximum of 50% of the investor’s increase of taxable reserves (mainly the net accounting profit before application of the tax-shelter exemption but after deduction of distributed dividends and other tax corrections) during that same tax year, with an absolute maximum of EUR750,000.

In principle, the exemption is granted in the year in which the framework agreement is concluded or the payments are made. Excess exemptions (exemptions that could not be used based on the above maximum) can be carried forward to until the third tax year following the calendar year in which the tax authorities pro­vided the tax-shelter certificate to the production company. The invested amounts must be effectively paid to the production com­pany within three months after the contract has been signed.

Like under the prior rules, the initial exemption is granted in conditionally and provisionally. In addition to the conditions men­tioned above, the following are the most noteworthy conditions:

  • In the financial statements of the investor, the exempt amounts must be recorded in an “unavailable reserve,” which needs to be maintained until the date the tax-shelter certificate is received.
  • For a specific project, the exemption is limited to 150% of the expected final tax value of the tax-shelter certificate as speci­fied in the framework agreement.

The exemption only becomes final when the tax-shelter certificate confirming the tax value of the investment is issued and sent to the tax authorities of the investor as an enclosure to the investor’s corporate income tax return. The certificate needs to be received by the investor by 31 December of the fourth year following the year in which the framework agreement is signed.

In addition, the final exemption is only granted to the extent that the tax value of the certificate corresponds to the value that was included in the agreement and to the extent that the limits and maximum amounts per tax period are respected. If the tax-shelter exemption is claimed incorrectly, corporate income tax on the difference becomes due, increased with late payment interest.

For the period between the payments of the funds and the receipt of the tax-shelter certificate, interest can be granted. This period is legally limited to 18 months, and the maximum interest rate that is allowed is fixed at the 12-month Euribor (increased by 450 basis points).

Tax incentives for start-ups. Within the framework of the govern­ment program, “Digital Belgium,” the government tries to assist young innovative undertakings with the development of a start­up plan. The program offers the tax incentives described below.

Tax shelter regime for equity investments in start-ups. The tax shelter for equity investments in start-ups is designed to encourage individuals to invest in new shares of start-ups on incorporation or within four years after incorporation, as well as in shares in quali­fying regulated starter funds. For investments in start-ups that qualify as small companies and for investments in starter funds, the personal income tax reduction amounts to 30% of a maximum investment of EUR100,000 per tax period. The rate is 45% for investments in start-ups that qualify as “micro-undertakings,” as defined in EU accounting directive 2013/34. The total amount of qualifying investments may not exceed EUR250,000 per start-up. The incentive applies only to cash investments that represent a maximum of 30% of the capital of the start-up. The shares must be held for at least four years. The incentive does not apply to in­vestments by the start-up’s management. The tax-shelter regime for investments in start-ups applies to shares issued on or after 1 July 2015.

Tax exemption for loans to start-ups through crowdfunding. Indi­viduals benefit from a tax exemption for interest on loans through a regulated crowdfunding platform for a maximum amount of loans per taxpayer per year of EUR15,000. The loan must have a maturity of at least four years. The exemption applies to loans to companies as well as to individuals who meet the criteria for small companies and who are registered for maximum of 48 months at the Crossroads Bank for Enterprises. The tax exemption does not apply to refinancing loans. The tax exemption applies to loans granted on or after 1 August 2015.

Partial payroll tax exemption for start-ups. Belgian law provides for a partial payroll tax exemption to decrease the wage costs for start-ups. The incentive applies to companies and to individual employers who are registered for a maximum of 48 months at the Crossroads Bank for Enterprises. If the start-up meets the criteria for small companies, the exemption rate is 10%. The exemption rate is 20% for “micro-undertakings,” as defined in EU account­ing directive 2013/34. The partial payroll tax exemption for start­ups applies to salaries paid as on or after 1 August 2015.

Capital gains. Capital gains on the disposal of tangible and intan­gible assets are taxed at the ordinary rate. If the proceeds are reinvested in depreciable fixed assets within three years (or a longer period in certain circumstances) and if certain other condi­tions are satisfied, the taxation of the capital gains is deferred over the depreciation period of the newly acquired assets.

Capital gains on shares are taxed at a reduced rate of 0.412% (or exempt from tax if the company is a small company), subject to conditions (subject-to-taxation test and holding period require­ment of one year [see Dividends]). If the taxation test is met, but the holding period requirement is not met, a 25.75% tax rate applies. If the taxation test is not met, the ordinary rate applies. The reduced rates also apply to capital gains on shares in compa­nies holding real estate (unless the general anti-avoidance rule applies). Any capital losses on these shares are generally not tax deductible, except to the extent of the loss of fiscally paid-up capital in a liquidation.

Capital gains realized on an exchange of shares in a tax-neutral restructuring are exempt from tax under certain conditions.

Administration. A tax year refers to the year following the finan­cial year if the financial year ends on 31 December. If the finan­cial year ends before 31 December, the tax year refers to the year in which the financial year closes. Consequently, the 2016 tax year relates to a financial year ending between and including 31 December 2015 and 30 December 2016.

To avoid a surcharge, tax must be paid in advance in quarterly installments. For the 2016 tax year, the percentage of the sur­charge is 1.125%. For a calendar-year taxpayer, the quarterly installments in 2016 are due on 11 April, 11 July, 12 October and 21 December.

The balance of tax payable is due within two months after receipt of the notice of assessment.

Reporting obligation for payments to tax havens. Both resident and nonresident companies are required to report all direct or indirect payments (regardless whether these payments are expens­es) in excess of EUR100,000, made to beneficiaries with an address or financial account in “tax havens” or low-tax jurisdic­tions that do not “effectively or substantially” meet the Organisation for Economic Co-operation and Development (OECD) standard on transparency and the exchange of informa­tion during the entire tax period in which the payment is made. The payments must be reported on a special form, which must be annexed to the annual corporate income tax return. These pay­ments are only tax deductible if they relate to real and genuine transactions and if they are made to persons that are not artificial constructions. Payments to a branch, located in a non-listed state, but with a head office in a listed state are also reportable.

Advance rulings. An advance decision in tax matters (tax ruling) is a unilateral written decision by the Belgian tax authorities at the request of a (potential) taxpayer about the application of the tax law in a specific situation that has not yet occurred, as described by the taxpayer. The purpose of such a ruling is to provide upfront certainty to the taxpayer.

The tax authorities must respond to a ruling request within a three-month period, which may be extended by mutual agreement. A ruling may be valid for a period of five years.

However, advance rulings are not issued in certain circumstances such as the following:

  • Transactions that have already been implemented or that are in a tax litigation phase
  • Transactions that lack economic substance in Belgium
  • Transactions, essential parts of which involve tax havens that do not cooperate with the OECD

Ruling requests filed with the Belgian tax authorities that relate to multinational investments and transactions must disclose other ruling requests filed in EU or treaty countries regarding the same matters.

In principle, the advance rulings are published.

Dividends. Under the dividend participation exemption, 95% of the dividends received by a qualifying Belgian company or Belgian branch is exempt from tax. The participation exemption applies only if a minimum participation test and a taxation test are satis­fied. To satisfy the minimum participation test, the following requirements must be met:

  • The recipient company must own a minimum participation of 10% of the share capital or a participation with an acquisition value of at least EUR2,500,000.
  • The shares must be held for at least one year.

The minimum participation thresholds and the one-year holding period requirement do not apply to dividends received by qualify­ing investment companies.

In the case of insufficient profits, the excess participation exemp­tion can be carried forward indefinitely to the extent that it relates to qualifying dividends (that is, dividends from companies estab­lished in the EEA or in a country with which Belgium has entered into a double tax treaty that has an equal treatment clause for dividends). Non-qualifying dividends can give rise to the partici­pation exemption, but in the case of insufficient profits, the excess participation exemption cannot be carried forward.

Specific exclusion rules apply under the taxation test. However, certain of these exclusion rules contain exceptions or transpar­ency rules.

The standard statutory withholding tax rate for dividends paid by Belgian companies is 27%. A reduced rate applies to dividends paid by small companies on nominative shares issued on or after 1 July 2013 if these shares are received in exchange for a contri­bution of cash into the company and if an ownership requirement and a holding period requirement are met. A 20% rate applies to dividends distributed during the third year following the contri­bution, and a 15% rate applies to dividends paid in or after the fourth year following the contribution.

Exemptions and reduced rates are available under Belgium’s tax treaties or domestic legislation. For example, withholding tax is not imposed on dividends distributed to a qualifying treaty parent. This is a company that holds or commits itself to hold a sharehold­ing of at least 10% in a Belgian company for an uninterrupted period of 12 months.

A tax reduction or refund of withholding taxes is also provided for dividends paid by Belgian companies to Belgian companies that hold a participation of less than 10% but with an acquisition value of at least EUR2,500,000. If the receiving company is a nonresident company (EEA or non-EEA), a 1.69% withholding tax applies (instead of a refund).

Effective from 1 October 2014, a 25% withholding tax is imposed in the event of the liquidation of a company. A transitory regime provided for the possibility of incorporating part of the existing retained earnings in the capital of a company at a tax rate of 10% before the increase of the tax rate and without the liquidation of the company. If these funds remain in the capital of the company for at least eight years following their incorporation into the capi­tal (four years for small companies), they can be distributed tax-free through a subsequent capital reduction.

Effective from the 2015 tax year, the transitory regime of 10% withholding tax becomes permanent for small companies. Small companies may allocate all or a part of their taxed profits to a liquidation reserve, booked to a separate account, at a tax charge of 10%. If the liquidation reserve is maintained until the liquida­tion of the company, no additional tax is levied on these funds. The distribution of the funds to the shareholders before the liqui­dation of the company is subject to an additional but favorable withholding tax rate of 5% (distribution of a dividend after five years following the last day of the tax period in which the reserve is formed) or 17% (distribution within five years). Recent legis­lation has also expanded this liquidation reserve regime to the 2013 and 2014 tax years. This implies that small companies may transfer all or part of their after-tax profit for those tax years to a special liquidation reserve. Subject to the payment of a 10% anticipative levy by 30 November 2015 (for the 2013 tax year) or 30 November 2016 (for the 2014 tax year), future distributions also enjoy favorable withholding tax treatment.

Fairness tax. A separate minimum corporate tax of 5.15% (including 3% surtax) applies to all Belgian companies that do not qualify as a small company under the Belgian company code and to permanent establishments of nonresident companies. It is levied in the event of a dividend distribution if any part of the distributed profits has not been effectively taxed at the Belgian corporate income tax rate of 33.99%. The fairness tax is triggered when dividends are declared and the tax base is reduced by the application of the notional interest deduction or tax losses carried forward. The tax base for this tax is determined based on a for­mula in which the “untaxed” part of distributed profits is multi­plied by a proportionality factor.

Foreign tax relief. Income derived from a permanent establish­ment abroad may be exempt under the provisions of a tax treaty. A Belgian company that receives foreign-source interest income and royalties subject to a foreign withholding tax can claim a foreign tax credit in Belgium if certain conditions are satisfied. The maximum foreign tax credit that may be claimed equals 15/85 of the net income at the border.

Determination of trading income

General. Taxable income is based on income reported in the annual financial statements and includes all gains, profits, costs, dividends, interest, royalties and other types of income.

Certain business expenses are not deductible for tax purposes, such as certain car expenses, 31% of restaurant expenses and 50% of entertainment expenses.

Inventories. Stock values may not exceed the lower of cost or market value; cost is defined as the purchase price of raw materi­als plus direct and indirect production costs. However, the inclu­sion of indirect production costs is optional. Accepted valuation methods are first-in, first-out (FIFO); last-in, first-out (LIFO); and weighted average. Valuation of stocks at replacement cost is not allowed.

Provisions. Provisions are tax deductible only if they are account­ed for and if they relate to specific charges that are probable taking into account events occurring during the applicable finan­cial year.

Depreciation. In principle, depreciation rates are determined based on the anticipated useful economic life of the assets. The follow­ing straight-line rates are generally accepted.

Asset Rate (%)
Office buildings 3
Industrial buildings 5
Chemical plants 8 to 12.5
Machinery and equipment (including information technology) 10 to 20
Office furniture and equipment 10 to 15
Rolling stock (motor vehicles) 20 to 33
Small tools 33 to 100

The declining-balance method and accelerated depreciation are also allowed under certain circumstances. For assets with an amortization period of less than five years, the annual deprecia­tion rate under the declining-balance method may not exceed 40% of the acquisition value.

Audiovisual investments must be amortized using the straight-line or declining-balance method, with no minimum amortization period. R&D investments must be amortized for tax purposes using the straight-line method over a period of at least three years. All other intangible assets must be amortized for tax purposes using the straight-line method over a period of at least five years.

Investment deduction. A 13.5% investment deduction is available for investments during the 2015 and 2016 tax years in environ­mentally friendly R&D, energy savings and related patents by resident and nonresident companies. A company can opt for a spread investment deduction of 20.5% (2015 and 2016 tax years) and accordingly deduct each year 20.5% of the annual amortiza­tion. For security-related investments made by qualifying small companies, a 20.5% investment deduction (2015 and 2016 tax years) is available.

For investments made on or after 1 January 2016, qualifying small companies can apply an 8% investment deduction. Effective from the 2016 tax year, these small companies are also entitled to an investment deduction of 13.5% with respect to investments in fixed digital assets, such as payment systems and cybersecurity systems.

For investments made on or after 1 January 2016 that relate to high-technology products, a spread investment deduction of 20.5% is allowed to all companies (not only small companies).

If the company has insufficient taxable income, the investment deduction may be carried forward.

For investments in R&D, a company can irrevocably opt for a tax credit instead of a deduction at the same rate as the investment de duction. As opposed to the investment deduction, this tax credit is effectively paid out if a company has insufficient taxable income for five consecutive tax years.

Tax incentives exist for investment in Belgian audiovisual works (see Section B) and for the shipping industry.

Patent box. Resident and nonresident companies can benefit from the “patent income deduction.” This incentive provides a tax de duction equal to 80% of the gross income derived from certain new patents.

Currently, the deduction applies to the following four types of patents:

  • Self-developed patents by Belgian companies (or branches), developed in R&D centers in Belgium or abroad
  • Patents acquired by Belgian companies (or branches) from related or unrelated parties, provided that they are being further developed in R&D centers in Belgium or abroad, regardless of whether such development results in additional patents
  • Patents licensed from related or unrelated parties by Belgian companies (or branches), provided that they are being further developed in R&D centers in Belgium or abroad, regardless of whether such development results in additional patents
  • Additional protective certificates

The tax deduction is available for income derived from the licens­ing of the patents to related or unrelated parties and for income derived from the use of these patents in the production process of patented products, either by a Belgian company or branch or on its behalf.

For patents that are licensed to related or unrelated parties by Belgian companies or branches, the deduction equals 80% of the patent income received, to the extent that the income is at arm’s length, resulting in an effective tax rate of 6.8%. This rate can be further reduced by taking into account other deductions, such as the notional interest deduction (see Section B).

For patents that are used in the production process by or on behalf of Belgian companies or branches, a deemed deduction may be claimed with respect to the taxable profits of the Belgian com­pany or branch, equal to 80% of the arm’s-length royalty that would have been received by the Belgian company or branch if it had licens ed the patents used in the production process to unre­lated third parties.

For patents licensed or acquired from third parties, the base on which the 80% exemption is calculated must be reduced by the following:

  • Compensation paid to obtain the ownership of licensee rights in such patents, to the extent that they were deducted from the Belgian tax base
  • Amortization claimed with respect to the acquired value of the patents, to the extent that they were deducted from the Belgian tax base

The patent income deduction may be claimed in addition to the normal tax deductions of all R&D-related and other business expenses, such as R&D infrastructure costs, salary costs, R&D personnel costs and patent registration duties.

Any excess deduction for patent income may not be carried for­ward to future years.

The deduction for patent income is available only if it relates to income derived from patents that have not been used for the sale of goods or for services to third parties by Belgian companies or branches, licensees or related parties before 1 January 2007.

Effective from 2016, significant changes to the patent box regime are expected.

Relief for losses. In general, companies may carry forward tax losses without limitations. However, certain limitations may apply in cases of restructurings and changes of control.

Tax losses cannot be carried back.

Other significant taxes

The following table summarizes other significant taxes.

Nature of tax Rate (%)
Value-added tax, standard rate 21
Social security contributions, on gross salary
Employer (approximately) 35
Employee 13.07
Real estate tax; rate depends on location (allowed as a deductible expense for corporate income tax purposes) Various
Environmental tax; rate depends on the
location and the activity or product; tax
is not deductible for corporate income tax purposes
Various
Registration duties, on contributions to companies 0
Registration duties on the transfer of immovable property 10 / 12.5

 

Miscellaneous matters

Foreign-exchange controls. Payments and transfers do not require prior authorization. However, for statistical purposes, financial in stitutions are required to report all transactions with foreign coun­tries to the National Bank of Belgium. Resident individual enter­prises are also subject to this reporting obligation if they conclude the transactions through nonresident institutions or directly.

Transfer pricing. The Belgian Income Tax Code (ITC) contains anti-avoidance provisions that relate to specific aspects of trans­fer pricing. “Abnormal and gratuitous advantages” granted by a Belgian enterprise are added to the tax base of the Belgian enter­prise, unless the advantages are directly or indirectly part of the taxable income of the recipient in Belgium. The ITC also contains anti-avoidance provisions concerning royalties, interest on loans and other items, as well as a provision on the transfer of certain types of assets abroad. Under these provisions, the taxpayer must demonstrate the bona fide nature of the transaction.

Treaty withholding tax rates

The rates in the table below reflect the lower of the treaty rate and the rate under domestic tax law on outbound dividends. Effective from 1 Janu ary 2007, Belgium introduced an exemption from dividend withholding tax for companies located in countries with which Belgium has entered into a tax treaty. The exemption is subject to the same conditions as those contained in the EU Parent-Subsidiary Directive (see footnote [f]). However, the treaty must contain an exchange-of-information clause. As a result, certain countries are excluded (see footnote [k]).

In reaction to the OECD’s position regarding the application of Article 26 (exchange of information) of the model convention in treaties entered into by Belgium, Belgium began renegotiating all treaties in 2009. This has resulted in more than 40 new treaties (the vast majority of which have not yet become effective). It is expected that most of these treaties will enter into effect in the upcoming years. In some cases, the negotiations are limited to the exchange of information only. For certain treaties, other articles are also included in the negotiations.

Dividends (a)(k)

%

Interest (b)

%

Royalties (c)

%

Albania 5/15 (m) 5 5
Algeria 15 15 (i) 15 (e)(i)(j)
Argentina 10/15 (m) 12 15 (i)
Armenia 5/15 (m) 10 (i) 8
Australia 15 10 10
Austria 0/15 (f) 15 0 (g)
Azerbaijan 5/10/15 (m) 10 10 (e)
Bahrain 0/10 (m) 5 0
Bangladesh 15 15 10
Belarus 5/15 (m) 10 5
Brazil 10/15 (m) 10/15 (i) 15 (i)
Bulgaria 10 10 (i) 5
Canada 5/15 (m) 10 10 (i)
Chile 0/15 (m) 5/15 5/10
China 5/10 (m) 10 7
Congo (Democratic Republic of) 5/10 (i)(m) 10 10
Côte d’Ivoire 15/18 16 10
Croatia 5/15 (m) 10 (i) 0
Cyprus 0/10/15 (f)(m) 10 (i) 0
Czech Republic 0/5/15 (f)(m) 10 (i) 0 (n)
Denmark 0/15 (f)(m) 10 0
Ecuador 5/15 (m) 10 (i) 10
Egypt 15/20 (m) 15 15 (i)
Estonia 0/5/15 (f)(m) 10 10 (i)
Finland 0/5/15 (f)(m) 10 (i) 5 (i)
France 0/10/15 (f)(m) 15 0
Gabon 15 15 (i) 10
Georgia 5/15 (m) 10 (i) 10 (i)
Germany 0/15 (f) 0/15 (i) 0
Ghana 5/15 (m) 10 (i) 10 (i)
Greece 0/5/15 (f)(m) 10 (i) 5
Hong Kong SAR 0/5/15 (m) 10 (i) 5
Hungary 0/10 (f) 15 (i) 0
Dividends (a)(k)

%

Interest (b)

%

Royalties (c)

%

Iceland 5/15 (m) 10 (i) 0
India 15 10/15 (i) 10
Indonesia 10/15 (m) 10 10
Ireland 0/15 (f) 15 0
Israel 15 15 10 (e)
Italy 0/15 (f) 15 5
Japan 5/15 (m) 10 10
Kazakhstan 5/15 (m) 10 10
Korea (South) 15 10 10
Kuwait 0/10 (i) 0 10
Latvia 0/5/15 (f)(m) 10 (i) 10 (i)
Lithuania 0/5/15 (f)(m) 10 (i) 10 (i)
Luxembourg 0/10/15 (f)(m) 15 (p) 0
Malaysia 15 10 (i) 10 (h)
Malta 0/15 (f) 10 10 (h)
Mauritius 5/10 (m) 10 (i) 0
Mexico 5/15 (m) 10/15 10
Mongolia 5/15 (m) 10 (i) 5 (i)
Morocco 6.5/10 (m) 10 (i) 10
Netherlands 0/5/15 (f)(m) 10 (i) 0
New Zealand 15 10 10
Nigeria 12.5/15 (m) 12.5 12.5
Norway 5/15 (m) 15 (i) 0
Pakistan 15 15 15/20 (j)
Philippines 10/15 (m) 10 15
Poland 0/5/15 (f)(m) 0/5 (i) 5 (i)
Portugal 0/15 (f) 15 10
Romania 0/5/15 (m) 10 5
Russian Federation 10 10 (i) 0
Rwanda 0/15 (m) 0/10 (i) 10 (i)
San Marino 0/5/15 (m) 10 (i) 5
Senegal 15 15 10
Singapore 0/5/15 (m) 5 (i) 5 (i)
Slovak Republic 0/5/15 (f)(m) 10 (i) 5 (i)
Slovenia 0/5/15 (f)(m) 10 5
South Africa 5/15 (m) 10 (i) 0
Spain 0/15 (f)(m) 10 (i) 5
Sri Lanka 15 10 10
Sweden 0/5/15 (f)(m) 10 (i) 0
Switzerland 0/10/15 (l)(m) 10 (i) 0
Taiwan 10 10 10
Thailand 15/20 (m) 10/25 (i) 5/15 (j)
Tunisia 5/15 (m) 5/10 (i) 11
Turkey 15/20 (i)(m) 15 10
Ukraine 5/15 (m) 2/10 (i) 10 (i)
USSR (o) 15 15 0
United Arab Emirates 5/10 (m) 5 5 (i)
United Kingdom 0/10/15 (f)(m) 10 (i) 0
United States 0/5/15 (m) 0/15 (i) 0
Uzbekistan 5/15 (m) 10 (i) 5
Venezuela 5/15 (m) 10 (i) 5
Vietnam 5/10/15 (m) 10 5/10/15 (i)
Yugoslavia (d) 10/15 (m) 15 10
Non-treaty
countries
27 27 27

a) The domestic withholding tax rate for certain dividends is reduced (see Section B).

b) The standard withholding tax rate under Belgian domestic tax law is 27%. Please consult the relevant treaty for details concerning a possible exemption (Ukraine: exemption or 2% rate). Various exemptions under Belgian domestic tax law are available. Belgium also applies the EU Directive on Royalties and Interest between related companies (Council Directive 2003/49/EC). Under this directive, interest payments between companies located in the EU are exempt from withholding tax if one of the companies has a direct or indirect participation of 25% or more in the other company. The list of companies covered by this directive is more limited than the list contained in the EU Parent-Subsidiary Directive.

c) Royalties are subject to a withholding tax of 27% under Belgian domestic tax law. Various exemptions under Belgian domestic tax law are available. Bel­gium also applies the Directive on Royalties and Inter est (Council Directive 2003/49/EC). Under this directive, royalties paid be tween companies located in the EU are exempt from withholding tax if one of the companies has a direct or indirect participation of 25% or more in the other company. The list of companies covered by this directive is more limited than the list contained in the EU Parent-Subsidiary Directive.

d) Belgium is honoring the Yugoslavia treaty with respect to Bosnia and Herze­govina, Macedonia, Montenegro and Serbia.

e) A lower rate applies to royalties for the use of works of art, science or litera­ture, other than motion pictures. The lower rate is 5% under the Algeria and Azerbaijan treaties and 0% under the Israel treaty.

f) Under the EU Parent-Subsidiary Directive, which has been incorporated in Belgian domestic law, no withholding tax is imposed on dividends paid by a Belgian subsidiary to a parent company in another EU state if the recipient owns at least 10% of the capital of the payer for at least one year.

g) A 10% rate applies if the recipient owns more than 50% of the capital of the Belgian company.

h) A 0% rate applies to copyright royalties.

i) Please consult the treaty for further details.

j) A 0% rate (Algeria and Thailand, 5%) applies to copyright royalties other than for motion pictures.

k) Belgium has extended the application of the EU Parent-Subsidiary Directive to all companies located in a country with which Belgium has entered into a tax treaty. In addition to the conditions that must be met under the directive (10% participation for at least one year and qualifying company), the treaty must contain an extended exchange-of-information clause.

l) The EU and Switzerland entered into an agreement that contained, among other items, a measure providing that the EU Parent-Subsidiary Directive also applies to relations between EU member states and Switzerland. Consequently, a withholding tax exemption may be claimed for dividends paid by a Belgian company to a Swiss company if, at the time of payment of the dividends, the recipient of the dividends has held a 25% participation in the payer for at least two years and if certain other conditions are satisfied.

m) The following lower rates apply to dividends paid by Belgian subsidiaries if the recipient holds the indicated level of participation.

Lower rate (%) Level of participation
Albania 5 25.00%
Argentina 10 25.00%
Armenia 5 10.00%
Azerbaijan 5 30% and USD500,000 (1)
Azerbaijan 5 USD10,000,000 (1)
Azerbaijan 10 10% and USD75,000
Bahrain 0 10.00%
Belarus 5 25.00%
Brazil 10 10.00%
Canada 5 10.00%
Chile 0 10.00%
China 5 25.00%
Congo (Democratic Republic of) 5 25.00%
Croatia 5 10.00%
Cyprus 10 25.00%
Czech Republic 5 25.00%
Denmark 0 25.00%
Ecuador (2) 5 25.00%
Egypt 15 25.00%
Estonia 5 25.00%
Finland 5 25.00%
France 10 10.00%
Georgia 5 25.00%
Ghana 5 10.00%
Greece 5 25.00%
Hong Kong SAR 5 10.00%
Hong Kong SAR 0 25.00%
Iceland 5 10% (3)
Indonesia 10 25.00%
Japan 5 25.00%
Kazakhstan 5 10.00%
Latvia 5 25.00%
Lithuania 5 25.00%
Luxembourg 10 25% or EUR6,197,338.12
Mauritius 5 10.00%
Mexico 5 25.00%
Mongolia 5 10.00%
Morocco 6.5 25.00%
Netherlands 5 10.00%
Nigeria 12.5 10.00%
Norway 5 25.00%
Philippines 10 10.00%
Poland 5 25% (4)
Poland 5 10% and EUR500,000 (4)
Romania 5 25.00%
Rwanda 0 25.00%
San Marino 5 10.00%
San Marino 0 25.00%
Singapore 5 10.00%
Singapore 0 25% (4)
Slovak Republic 5 25.00%
Slovenia 5 25.00%
South Africa 5 25.00%
Spain 0 25.00%
Sweden 5 25.00%
Switzerland 10 25.00%
Thailand 15 25.00%
Tunisia 5 10.00%
Turkey 15 10.00%
Ukraine 5 20.00%
United Arab Emirates 5 20.00%
United Kingdom 0 10.00%
United States 0 10% of capital (5)
United States 5 10% of voting shares (5)
Uzbekistan 5 10.00%
Venezuela 5 25.00%
Vietnam 5 50.00%
Vietnam 10 25% but less than 50%
Yugoslavia 10 25.00%

 

 

  1. Dividends may qualify for the 5% rate if the recipient holds any of the three listed levels of participation.
  2. As a result of the most-favored nations clause in the treaty, this lower rate applies.
  3. The 5% rate does not apply to dividends distributed by an Icelandic company if such divi­dends are deductible from the tax base in Iceland or if they can be carried forward as an operating loss of the company in Iceland.
  4. The 0% rate applies if the beneficial owner of the dividends is a company that has owned directly shares representing at least 25% of the capital of the payer of the dividends for a 12-month period ending on the date on which the dividend is paid.
  5. The 0% rate applies if the beneficial owner of the dividends is a company that has owned directly shares representing at least 10% of the capital of the payer of the dividends for a 12-month period ending on the date on which the dividend is declared. The 5% rate applies if the beneficial owner is a company that owns directly at least 10% of the voting shares of the payer of the dividends.

n) A 5% rate applies to royalties paid for the use of, or the right to use, indus­trial, commercial or scientific equipment.

o) Belgium is honoring the USSR treaty with respect to Kyrgyzstan, Moldova, Tajikistan and Turkmenistan.

p) A 0% rate applies to interest paid by a company to another company if the recipient has a direct or indirect participation in the payer of less than 25%.

Belgium has signed new double tax treaties, additional treaties or protocols that have not yet become effective with Austria, Canada, Congo (Democratic Republic of), Greece, Iceland, Ireland, Isle of Man, Korea (South), Macau SAR, Macedonia, Malaysia, Malta, Mexico, Moldova, New Zealand, Norway, Oman, Poland, Qatar, the Russian Federation, Rwanda, San Marino, Spain, Switzerland, Tajikistan, Turkey, Uganda, Uruguay, the United Kingdom and Uzbekistan.