Like so many governments, the Belgian government is using corporate tax rules to make Belgium a competitive location for multinational companies and foreign investment.

The economic downturn, the implementation of the OECD’s Base Erosion and Profit Shifting (BEPS) project and the public opinion requiring fairness in corporate taxation, means that many of the competitive tax advantages are scaled down.

Since the beginning of the century, Belgium has become an attractive location for companies and multinational groups. Even after a drop of its corporate income tax rate from 33.99% to 25%, the rate still remains quite high in the E.U., but Belgium offers a wide-range of tax-planning opportunities for Belgian holding companies and Belgian branches.

The release of the Panama Papers and the Paradise Papers by the International Consortium of Investigative Journalists have shown how a company’s reputation can suffer from the wrong corporate tax decisions that may make economic sense.

Tax management means monitoring potential tax risks, assessing tax positions, developing processes to minimise risks and following-up on compliance processes. We assist tax managers and financial professionals in assessing the tax impact of business decisions.

These opportunities include,

• The participation exemption, which is both a dividend received deduction - i.e. a full exemption of corporate income tax for dividends received from qualifying subsidiaries - and a full exemption of capital gains on the shares of qualifying subsidiaries.
• No capital tax
• Financing costs are generally tax deductible
• The extension of the exemption of withholding tax on outbound dividends under the E.U. Parent-Subsidiary Directive to all countries with which Belgium has a double tax treaty
• An extensive network of 100 double taxation treaties
• No net wealth tax
• The innovation income deduction, which allows a deduction of 85% of qualifying innovation income determined in accordance with the O.E.C.D.’s nexus rules
• The ruling practice, which allows taxpayers to obtain a binding opinion from the Belgian Tax Ruling Committee on tax issues and the Belgian Accounting Standards Committee on accounting issues

Our services include tax compliance and tax risk management, assistance in tax audits and tax litigation, advice on tax incentives and the tax aspects of corporate restructuring.

We advise on cross border corporate tax issues, the application of double tax treaties and the taxation in Belgium of overseas companies (permanent establishments and profit allocation, …). For international tax issues we rely on an extensive network of corresponding tax firms.

As we are not part of a formal international network, we can work with the most competent and reliable tax lawyers and advisers in other jurisdictions.