The taxation of dividends in Belgium
Business taxation in Belgium
also includes a dividend tax
for those dividends received
by a company. A special deduction applies in the country. Resident Belgian companies
and permanent establishments of foreign companies are required to withhold tax when making dividend payments
, as well as interest and royalties payments.
The withholding tax rate for dividends can be lower if a double tax treaty is in place between Belgium and the country where the company receiving the dividends is located. The EU Parent-Subsidiary Directive also influences the manner in which dividend payments are made.
Preferential dividend withholding tax rates in Belgium
The standard withholding tax rate on dividends in Belgium
is 27% (increased in 2016 from 25%). This applies when no double tax treaty
or the Parent-Subsidiary Directive are applicable. A reduced rate of 25% is also applicable and so is a 15% rate for shares issued in exchange for cash distributions made to small and medium-sized companies.
The withholding tax rate on dividends is 0% if a tax treaty or directive is in force and if the company that receives the dividend payment holds at least 10% of the company making the payment and has held participation in that company for at least one uninterrupted year.
More than 90 double tax treaties
are currently in force in the country. Foreign investors
who want to benefit from the advantages offered by these conventions can request assistance for tax planning from our experts.
The Belgian taxation system
The main tax levied on companies
operating in Belgium is the corporate income tax
. A payroll tax, the social security contributions, the value added tax and other regional or local taxes also apply.
Belgium offers certain tax incentives including for innovation activities and research and development. If you are interested in knowing more about the taxation system as well as advantages for investors, you can request specialised information from our experts.