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Paying Taxes in Belgium

March 10, 2011, 2:29 pm
BridgeWest

1. What is the corporate tax in Belgium?

The corporate income tax rate on the total income of resident companies in Belgium is 33, 99% and it includes a 3% called 'crisis surcharge', which was introduced by the Belgian government in 1993, as a crisis complementary tax contributing to social security funding. However, Belgian corporations with a taxable income of under EUR 322,500 are subject to reduced rates, if the company pays an annual taxable income of at least EUR 36,000, the company is not a holding company, nor does 50% of the company belong to one or more companies.



2. What is the VAT in Belgium?


The Value Added Tax in Belgium or the VAT has been introduced since 1st of January, 1971 and the standard rate is 21%. However there are reduced rates of 12% or 6% that are applicable in some conditions.



3. How can the VAT be refunded in Belgium?


In Belgium the Value Added Tax is applied by a standard rate of 21%. As is any other country the VAT may affect the costs practiced by a company, therefore some of them may be reduced by recovering the VAT paid. Refund claims should be submitted yearly, or in six months, or quarterly. If the application is for a period less than a year but higher than 3 months, the minimum amount cannot be lower than 400 EUR.

In order to claim VAT refund a company needs to provide all the original invoices with Belgian VAT, a copy of the most recent certificate issued by the Tax Authority and a special Letter of Authority authorizing a company specialized in VAT recovery to claim the refund

The VAT paid for the following cannot be refunded: manufactured tobacco, accommodations, meals and beverages included in a catering or accommodation agreement, entertainment expanses, vehicles sold to investors involved in vehicles sales or leasing, vehicles for passenger transport, motor vehicles used for passenger transport. If the vehicles are used also for other activities, a 50% refund may be asked.


4. What is the dividend tax in Belgium?

 

Usually, the tax on dividends is 25% iBelgium. By implementation of the parent-subsidiary regulations, there are no taxes on dividends paid to a company opened in Belgium or other EU country which holds at least 10 % of the shares(for more than a year) by the paying company.  In certain cases, the rate may be 21%. 10% are applied for liquidation dividends.

 

5. What are the taxes rates applied on other payments?

Interests are usually taxed with 21% but certain exemptions are granted, for example for interests paid by finance and holding companies or paid to financial institutions in treaty countries.

The royalties are subject to a withholding tax of 15%, but exemptions or minimizations are granted for treaty countries.

In Belgium no withholding tax on technical services is required and also there is no branch remittance tax.

 

6. Are there any incentives for foreign investors in Belgium?


Belgium is one of the top locations for foreign investors to commence business in Europe. Besides the affordable tax regime, the Belgian Government offers plenty incentives and benefits in order to create the best climate for foreign investors. Some of the incentives meant to create an optimal climate include favorable fiscal rulings, employment and training measures, foreign trade opportunities, and financial aid linked to investments. The main locations for investment competences are in Brussels, Wallonia and Flanders. The double tax treaties (more than 90) and parent-subsidiary treaties signed all over the years are offering exemption or minimizations on the corporate tax or on the withholding taxes on dividends, interests and royalties.


7. Why do I need a local accountant for my Belgian business?


Even though Belgium offers a relative risk-free business climate, a foreign entrepreneur may find himself or herself in difficulty of understanding all the legally required procedures. An accountant is required for any Belgian business and he or she will be able to liaise professionally with the local taxation administration. For a better understanding of the local taxation requirements it is required for the accountant to be a licensed Belgian professional.

 




Company Formation Belgium
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