TAX RULING

Ruling or advance ruling that creates legal certainty with regard to taxation

• The investor describes the facts and enables the tax administration to determine, in advance and on a case-by-case basis, how the tax regulations will be applied
• Forecasts all the tax implications of an investment project
• Legally binding for all tax authorities

Characteristics:

• Valid for all taxes (corporation, VAT, personal income, etc.)
• Ruling on a case-by-case basis
• Tax certainty for the investor + binding for 5 years
• Renewable
• Open to existing and potential investors

TAX INCENTIVES FOR R&D

• Deduction for innovation income: income generated by a patent benefits from a favourable tax regime. A deduction of 85% is applicable to the relevant income, which brings the effective tax rate to 3.75%
• Deduction for R&D investments
• Exemption from the withholding tax on professional income for researchers
  • Exemption of 80% from the withholding tax on professional income on researchers' salaries
  • For researchers with a specific degree (doctor, engineer, masters, bachelors, etc.)

 This is a real measure to reduce the salary cost for employees assigned to R&D. This makes Belgium particularly competitive for R&D centres.

DEDUCTION FOR RISK CAPITAL

• Replaces the notional interest deduction
• Calculation basis = "incremental capital". Deduction limited to additional equity over a 5-year average
• Deduction rate calculated annually (for example, for the 2019 tax year: 0.746% for large organisations and 1.246% for SMEs)

 HOLDING COMPANIES SCHEME

• Exemption for dividends received: 100% deduction
• Deductibility of interest paid to acquire shares
• Exemption from capital gains on shares if the holding period is at least 12 months

SPECIAL TAX REGIME FOR IMPATRIATES

Who?

Employees, company directors and researchers, who perform a remunarated activity in Belgium

• Hired directly from abroad by a Belgian company, a Belgian establishment of a foreign company, or a non-profit organization
  OR
• Assigned by a foreign company, part of a multinational group, to one or more Belgian companies, one or more Belgian establishments of foreign company which belong to the same multinational group, or a non-profit organization

Conditions for employees/researchers

• No nationality requierement (for foreign or Belgian "nationals")
• No degree requirement for employees and managers, Degree requirement for researchers : doctor/master OR 10 years of relevant experience + mainly (80%) performing research activities
• 60-month period prior to the start of the entering into service :
  - must not have lived within a distance of less than 150km from the Belgian border;
  - must not have been a resident or non-resident taxpayer in Belgium
• Minimum salary requirement of € 75.000 per calendar year (except for researchers)

Benefits for employees/researchers

• Tax free expatriate allowance = "Costs Proper to the Employer (CPE)"
  - up to 30% of the gross salary, capped at € 90.000
  - paid ON TOP OF the salary
• Tax free of one-off reimbursements by the employer of school fees, moving and relocation costs
  - on top of the 30% tax free CPE
  - if reasonable and justified (documentatoin requirement)

Benefits for employer

On expatriate allowance and reimbursements of expenses :

• No tax
• No social security contributions
• Deductible from the Corporate Tax base

Duration

• 5 years, potential extension with 3 years