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.

It is assumed that all income received by a company is, in principle, business income.

As a general rule, business expenses incurred or borne by the company during the taxable period in order to obtain or safeguard taxable business income are considered tax deductible. In order to be deductible, these expenses must be vouched for by proper documentation.

Therefore, the income tax base is based on the financial statements of the company with some adjustments, for example:

• disallowed expenses
• exempt foreign income
• dividends-received deduction
• notional interest deduction - see Belgium: notional interest deduction (NID)
• both distributed and retained profits are subject to corporate income tax
• tax losses carried forward
• investment deduction
• patent income deduction - see Belgium: patent income deduction (PID)