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New Measures Introduced to Belgian Budget Control

After long negotiations the Belgian Government has finally reached an agreement on the budget control of 2013. Taxand Belgium investigates the key tax updates to be introduced.

Liquidation withholding tax
On 30 March 2013 it was decided that the liquidation withholding tax rate will increase from 10% to 25% as off 1 October 2014. In the budget control the Belgian Government has built in a transition measure whereby the shareholders can still enjoy a 10% rate, if taxed reserves are incorporated into the capital before 1 October 2014. In the case of a subsequent capital decrease, these incorporated taxed reserves will be taxed at a rate of 15% in the first and second year.

Dividend withholding tax SME's
The Government decided to lower the dividend withholding tax rate from 25% to 15% for longer term investments in a SME. The decrease will be applicable on dividends that have been issued on shares due to a foundation or a capital increase of a SME. The rate would decrease after 3 years of uninterrupted ownership of the shares to 20% and as off the fourth year to 15%.

Notional interest deduction
As of tax year 2014 it will no longer be possible to combine the 2 advantageous measures of DRD-decrease and the notional interest deduction.

Discover more: Belgian budget control - new measures

Your Taxand contact for further queries is:
Luc Jouk
T. +32 3 238 92 91

Taxand's Take

The tax updates introduced by the budget control will help with the Belgian Government's objective of raising EUR 364 million. Multinationals who have operations in the jursidiction should investigate these new measures in order to comply where appropriate.

Taxand's Take Author

Luc Jouk