About the Belgium Holding Company Related Resources Belgium Key Elements
The Belgian Holding Company is an ordinary company which falls within the scope of general tax law and may benefit from the double taxation treaties concluded by Belgium and the European tax directives.
There are no limitations on the activities of the company.
The most common forms of companies in Belgium are the “Société Anonyme” (company limited by shares- SA) and the “Société Privé à Responsabilité Limitée” (private limited company- SPRL).
The minimum share capital for incorporation of a Belgian company is €61,500 for a “Société Anonyme” and €18,550 for a “Société Privé à Responsabilité Limitée”. While for a company incorporated in the first form the paid-up capital must be 1/4 with a minimum value of €61,500, for the second type of company it is only necessary a minimum of 1/3 paid-up capital (€6,200).
A company incorporated as a “Société Anonyme” may have bearer shares, although this is not expected to be the case in the near future.
A Belgian company is fully subject to tax at a normal rate of 33.99% (including a 3% crisis surcharge) but is eligible to benefit from the double tax treaties concluded between Belgium and other countries and from EU directives.
For companies with an annual profit margin of less than EUR 322,500 this rate is decreased to 24.98%.
Capital duties were abolished on 1st January 2006 on new corporations or when the capital of an existing corporation is increased.
No tax credit is granted for foreign withholding taxes (taxable income is calculated on income net of foreign withholding taxes).
The taxable income of a Belgian company is based on income reported in the annual financial statements and includes all profits and losses, gains and losses (speculative and non speculative), dividends, interest, royalties and rent.
Provided that the interest rate does not exceed arm’s length interest rates, all interest paid on financing the acquisitions of shares is deductible against taxable income. However, if the interest is paid to a beneficiary who benefits from a beneficial tax regime the interest will not be deductible to the extent that the related loans exceed 7 times the paid/up share capital at the end of the taxable period.
Dividends received by a Belgian company may be subject to a reduced level of corporate income tax if received from:
Capital gains on the sale of shares are exempt from tax if dividends qualify for the participation exemption.
Capital losses are not tax deductible. Exception is made for capital losses realised on the occasion of the liquidation of the company and to the extent that effectively paid-up capital is lost.
See income above.
Besides the common advantages of a holding company, the Belgian company may also enjoy from the following:
A 10% withholding tax is levied on liquidation proceeds. However, this tax may be credited against the Belgian corporate tax liability for Belgian corporate shareholders and is reimbursable in case it exceeds the tax liability of the taxpayer. The 10% tax rate is not applied if the conditions of the EU Parent-subsidiary Directive are satisfied.
Dividends paid by a Belgium company are exempt from withholding tax provided:
Interest on loans, registered securities or deposits paid to a non-resident are exempt from withholding tax if the following conditions are met:
All companies operating in Belgium and subject to corporate tax may deduct a part of their adjusted equity capital. The rate of the Notional Interest Deduction (NID) will be equal to the yield of the Belgian 10 year Government Bond.
The unused notional interest may be carry forward 7 years from the year of deduction. However, the amount of notional interest deducted may not be used freely by the company and must remain as a liability on the balance sheet during the 3 following years.
Double Tax Treaties
1Losses carry forward may only be offset against 75% of the profits of the year.
2If conditions are met.
3The lower rate applies if the recipient owns more than 20% of the shares.
A bespoke 'offshore' solution can be complex and requires careful planning and execution. We
therefore encourage our clients to contact us directly, without obligation.
While all of our consultants in our offices provide a Free Initial Consultation, the office and
consultant listed below has particular expertise in this area and will gladly assist with advice
on how to approach your unique challenge.
Alternatively, to select one of our multilingual offices, click here for a list of our office contact details.
Languages spoken in this office:Languages Spoken: English, Dutch, French, Italian, German and Spanish
REQUEST A CALLBACK