| Belgium
has a corporate income tax rate of 33.99%
(including a 3% so-called 'crisis surcharge')
and has never been considered a financial
center. However in order to attract the
headquarters of foreign multinational companies
Belgium accords favorable tax treatment
to entities known as "co-ordination centers".
It also offers a low-tax regime to expatriate
employees with specialist skills, and has
a relatively benign holding company taxation
regime.
On
1st January 2006 Belgium introduced a 'notional
interest deduction', taking effect in tax
year 2007, which allows all companies subject
to Belgian corporate tax (including Belgian
branches of foreign companies) to deduct
from their taxable income an amount equal
to the interest they would have paid on
their capital in the case of long-term debt
financing.
At
the same time, the 0.5% registration duty
on capital contributions will be abolished.
The calculation of the tax deduction will
begin with the ‘equity capital’
as stated in the company’s opening
balance sheet of the taxable period. Based
on Belgian accounting law, ‘equity
capital’ includes capital, share premiums,
revaluation gains, reserves, carry-forward
of profits or losses and capital investment
subsidies. The notional interest rate will
be set each year and will follow the average
annual 10-year government bond rate. Currently,
that rate is 3.442 %. The law sets a maximum
deviation of 1% from one year to the next
and a maximum percentage of 6.5%. The government
may change these percentages by Royal Decree.
The
notional interest deduction does not discriminate
between companies and complies fully with
existing Belgian and EU law. Discussions
with EU authorities have taken place and
the measure is compatible with EU State
Aid rules and the Code of Conduct.
Belgium Knowledge
Base
- BELGIAN
CO-ORDINATION CENTRES
- BELGIAN
SPECIAL EXPATRIATE FISCAL REGIME
- BELGIAN
HOLDING COMPANIES
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