Taxation in Belgium
Any company operating in Belgium, as well as individuals earning an income in the country, need to comply with the special requirements for taxation. Companies also need to comply with the existing accounting principles and the filing of the annual financial statements.
The tax year in Belgium is generally the same as the calendar year and the annual tax returns must usually be filed until June 30 of the year following the tax year. Penalties apply for late filings and noncompliance.
Taxes for companies
A company is considered a Belgian resident legal entity if it has its main operating office or management office in Belgium. Resident companies are taxed on their worldwide income and non-resident companies are taxed only on their Belgian-source income. For these types of companies, like branches in Belgium
, special taxation rules can apply. According to law, 95% of the dividends received by a Belgian company, regardless of the source, is exempt from tax. The last 5% is subject to the normal tax rate.
The general corporate income tax for companies in Belgium is 33%. A surcharge of 3% brings the effective tax rate to 33.99%. Small and medium-sized companies with an income of less than 322,500 euros are subject to a lower rate, provided that they comply with certain requirements. An alternative minimum tax can apply for large companies that distribute dividends and hat offset the losses carried forward against their taxable income. This fairness tax as it is referred is only due in some cases.
Other taxes for companies in Belgium include the withholding tax on dividends and royalties, the payroll tax, the real property tax, the social security tax or the transfer tax, which applies to the transfer or lease of Belgian real estate. Belgium does not impose a branch remittance tax, not a stamp duty tax or a technical service fees tax.
The tax tear in Belgium is the same as the accounting year. It can be the same as the calendar year or another period of 12 months. Tax returns should be filed at least one month following the date on which the annual general meeting of shareholders approves the financial statements. However, this cannot take place later than six months following the end of the financial year. Penalties do apply for failure to comply with the filing requirement and dates and are calculated according to an estimated annual income for the respective Belgian company
If you want to open a company in Belgium our experts can help you with tax compliance.
Taxes for individuals
Residents in Belgium are taxed on their worldwide income derived from salaries and wages as well as any income derived from owning real estate, securities, and other capital investments. An individual is considered a Belgian resident if he or she have their domicile in Belgium. Non-residents only have to pay taxes on their Belgian-source income. Employees in Belgium
need to pay social security contributions, ranging from 0.05% to 13.7%. Married couples can file a joint statement but their incomes will not be aggregated. The tax year for individuals is the same as the calendar year and the deadline for filing the annual tax return is generally on June 30th.