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Belgian Government Introduces New NID-rate

28 Jan 2010

The Belgian Government decided on 13 November 2009 that the tax deductible percentage of the notional interest deduction ("NID") will amount to 3.8% in 2011 (financial year ending per 31 December 2010) and 2012 (financial year ending per 31 December 2011). Taxand Belgium discusses the new NID rate.

The NID is calculated as a percentage of the accounting equity of Belgian companies and Belgian establishments of foreign companies, without any special license or authorisation from the Government being required. Certain assets are excluded from the calculation base of the NID, such as participation in other companies.

Taxand's Take

As an alternative to the Belgian tax regime applying to "Coordination Centres" (a regime that will expire in 2010), the NID has proven to be an excellent tax planning tool for international financing operations, royalty structures etc... Such tax planning has even become more interesting since Belgium abolished in 2006 its capital duties on the incorporation or capital increase of Belgian companies.

The fact that the NID-rate has already been determined for two more tax years reveals the Belgian Governments' motivation and desire to express its long-term commitment to the NID-regime.

Your Taxand contact for further queries is:
Geert de Neef
T. +32 (2) 761 11 32

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