Corporate income tax

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Key information you will find in this section:

Who is subject to coporate income tax?

Companies, associations and organisations with legal personality are subject to Belgian corporate income tax if they engage in a business or profit-making activity and have their registered office, main establishment or place of effective management in Belgium.

More information on who is subject to corporate income tax

What are the coporate income tax rates?

The standard corporate income tax rate is 33.99% (including an austerity surcharge of 3%).

More information on what are the corporate income tax rates

What is the tax base?

In general, the tax base for corporate income tax purposes is determined on an accrual basis and consists of worldwide income minus allowed deductions.

More information on the tax base

Capital losses and gains

In principle, capital losses are deductible for corporate income tax purposes.

More information on capital losses and gains

What fiscal corrections increase the tax base?

Disallowed expenses
Expenses are mainly disallowed if and to the extent that:

they lack any genuine business purpose
they are not vouched for by proper documentation
their deductibility is limited for tax purposes (e.g. car costs, restaurant and reception costs, social benefits)
they are deemed excessive (not at arm's length)

Timing differences
Certain accounted costs (e.g. contingent liabilities and charges) can be temporarily disallowed from a tax point of view (e.g. if they are not specific), thus increasing the tax base.

More information on what fiscal corrections increase the tax base

What fiscal corrections lower the tax base?

Exempt foreign income
Generally, income a Belgian tax-resident company receives from a foreign branch is exempt from Belgian tax if the branch is in a country with which Belgium has a double taxation treaty.

Dividends-received deduction
Dividends received by Belgian tax-resident companies or permanent establishments of non-resident companies by virtue of holdings in resident or non-resident companies are 95% exempt from corporate income tax, provided the following (simplified) requirements are fulfilled.

Notional interest deduction
See Tax Incentives.

Patent income deduction. See Tax Incentives.

Tax losses carried forward
Tax losses can be carried forward without limit and be deducted from future profits.

Increased investment deduction
Companies acquiring new tangible or intangible fixed assets used in Belgium for environmentally friendly investments in research and development, energy-saving investments and patents and investments relating to security equipment can, subject to conditions, claim an additional deduction from their taxable profit equivalent to a basic percentage of the acquisition or investment value of those investments.

Capital gains realised on shares
Net capital gains on shares are 100% exempt provided the dividends relating to such shares qualify for the dividends-received deduction at the time the gains are realised.

More information on what fiscal corrections lower the tax base

Witholding taxes on dividends, interest and royalties

Dividends
Generally, dividends distributed by a Belgian company are subject to a Belgian domestic withholding tax of 25% (a reduced rate of 15% or even nil is possible provided certain conditions are met).

Interest
In principle, interest payments are subject to a domestic withholding tax of 15%. There are numerous exemptions (see 3.6) – e.g. interest income on Belgian-registered bonds paid to non-residents.

Royalties
Royalties are defined very broadly as "income derived from the letting, use or concession of movable goods". The Belgian tax authorities deem a "concession" to be any agreement under which a right is granted (for valuable consideration) to use or exploit a tangible or intangible asset, provided no legal ownership therein is transferred.

More information on witholding taxes on dividends, interest and royalties

Deducting royalties and interest

Royalties and interest paid are subject to the main principles governing the deductibility of expenses. Strictly speaking, there is no thin-capitalisation rule or "earnings-stripping rule" applying to such outlays.

More information on deducting royalties and interest

Can dividends be deducted?

Payments that qualify as a dividend from a Belgian tax point of view cannot be deducted.

More information on deducting dividends

Tax treaties

What are "tax treaties" and how do they benefit foreign investors?
Belgium has entered into various agreements with foreign jurisdictions designed to avoid and eliminate double taxation.

More information on tax treaties

Transfer pricing

What are the rules governing transfer pricing?
The concept of transfer pricing is based on the rule that companies in the same business group must transact with each other "at arm's length". This means that a company must be able to demonstrate that the prices at which it trades with affiliated companies are comparable to the prices and terms that would prevail in similar transactions between unrelated parties.

More information on transfer pricing

Need more information?
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