Belgium

Belgium, officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, as well as those of several other major international organisations such as NATO. Belgium covers an area of 30,528 square kilometres (11,787 sq mi), and it has a population of about 11 million people. Straddling the cultural boundary between Germanic and Latin Europe, Belgium is home to two main linguistic groups, the Dutch-speakers, mostly Flemish, and the French-speakers, mostly Walloons, plus a small group of German-speakers. Belgium's two largest regions are the Dutch-speaking region of Flanders in the north and the French-speaking southern region of Wallonia. The Brussels-Capital Region, officially bilingual, is a mostly French-speaking enclave within the Flemish Region. A small German-speaking Community exists in eastern Wallonia. Belgium's linguistic diversity and related political and cultural conflicts are reflected in the political history and a complex system of government.

Belgium is one of the most attractive European countries in terms of residence, citizenship and taxation. The country’s legislation and many of its regulations are based on this principle of international orientation.

Belgium offers an investor-friendly environment to anyone wishing to invest in an existing Belgian business or through a Belgian (holding) company investing in foreign businesses. Extensive tax treaty network allows investors to take advantage of tax planning opportunities with the establishment of a company in Belgium.

The Belgian tax system is very favourable for individuals and executives, holding companies within international structures and individuals with independent means. There are no wealth or net worth taxes, no taxation on capital gains realized on shares (as one of the last countries in Europe).

All commercial companies in Belgium are subject to corporation tax. The nominal corporate tax rate is 33.99%. For small and medium-sized enterprises (SMEs) with a taxable profit not exceeding €322,500, the tax rate drops to 24.98%.

Legal mechanisms make it possible to lower the nominal rate. Various tax incentives for individuals and companies make Belgium one of the most attractive places to locate and do business.

Belgium’s tax legislators are aware of the increasing importance of upfront legal certainty for existing and potential investors. Accordingly, Belgian tax legislation provides economic players with a generally applicable advance ‘ruling’ practice.

The procedure is simple, rapid, efficient and free of charge. The ruling is an advance decision that is issued within three months and is legally binding for up to five years.

One of the most innovative measures is the 'notional interest deduction'. This is a tax deduction for venture capital which alleviates the differences in tax treatment between finance raised through borrowed capital and finance raised through equity capital.

The system allows companies to deduct from their tax base a notional interest charge (not stated in the accounts) corresponding to a specific percentage of their 'adjusted' equity capital.

Belgium also has a withholding tax exemption on some dividends, which is also very popular with investors. This new exemption extends the European Parent-Subsidiary Directive between the EU Member States and Switzerland to all countries that have a double tax treaty with Belgium, such as Hong Kong and the United States.

Using Belgium as their holding location for investments in Europe allows corporate investors from treaty countries to repatriate European profits without paying dividend withholding tax and without a limitation on profits.

Our Belgian office was opened in December 2000.

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