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Belgian Government introduces new NID-rate


The Belgian Government decided on November 13, 2009, that the tax deductible percentage of the notional interest deduction ("NID") will amount to 3.8% for the tax years 2011 (financial year ending per 31 December 2010) and 2012 (financial year ending per 31 December 2011). Taxand Belgium investigate the impact of these changes.

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 participations in other companies.

Taxand's Take

As an alternative to the Belgian tax regime applying to "Coordination Centers", where the regime 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 become even more interesting since Belgium has abolished its capital duties in 2006 on the incorporation or capital increase of Belgian companies.

The fact that the NID-rate has been determined for - already - two more tax years, we are motivated by the Belgian Governments' 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 30

Taxand's Take Author