Invest in Belgium - An Intelligent Tax system
An Intelligent Tax system
While all commercial companies resident in Belgium are subject to corporate income tax, the authorities can help you find the best fiscal mechanisms allowing you to get your project off the ground. The Fiscal Department for Foreign Investments (at FPS Finance) provides free, confidential advice. There is an intelligent tax solution for your project.
The authorities are well aware of how important it is to enhance upfront legal certainty for potential and existing investors. Accordingly, Belgian tax legislation provides economic players with a generally applicable advance 'ruling' practice. This procedure is smooth, rapid and efficient. The ruling is issued within three months and the ruling decision is legally binding for up to five years. The ruling includes the various fiscal measures that can be used to lower the tax base or cost. The nominal tax rate is 33.99%. For small and medium-sized enterprises (SMEs) with a taxable profit not exceeding €322,500, the tax rate drops to 24.98% at the lower end of the tax scale. Legal mechanisms make it possible to lower the nominal rate.
These pro-business tax incentives make Belgium one of the most attractive places to set up a business.
One of the most popular measures is the notional interest deduction. Belgium is the only European country to alleviate the differences in tax treatment between finance raised through venture capital and finance raised through borrowed capital. It allows companies to deduct a notional charge (not stated in the accounts) from their tax base that corresponds to a specific percentage of their 'adjusted' equity capital.
The 'new domestic dividend withholding tax exemption' is also likely to become very popular among investors. The new domestic dividend withholding tax exemption extends the EU Parent-Subsidiary Directive between the 25 EU-countries and Switzerland to all countries worldwide that have a double tax treaty with Belgium , such as Hong Kong and the United States .
Using Belgium as their holding location for investments in Europe allows corporate investors from treaty countries to repatriate European profits without paying dividend withholding tax and without a limitation on profits.
The Belgian tax system has also created attractive conditions for employers, with lower wage costs for foreign executives and streamlined approach. For expatriate employees the employer's own expenses are reimbursed (additional costs arising from the position created in Belgium ). Days worked abroad are not included.
R&D projects also benefit from tax incentives, such as environmentally friendly investments.