Corporate Income tax
The rate of corporate tax depends on the size of your profits.
Companies must file their corporate tax return on an annual basis and make quarterly payments.
Before we delve into corporate tax, have a look at the main taxes in Belgium
In general, the tax base for Corporate Income Tax (CIT) consists of worldwide income less allowed deductions.
The rules are equally applicable to companies and PEs. It is assumed that all income received by a company is, in principle, business income.
CIT is levied at a rate of 29% plus a 2% crisis tax, which is a surtax, implying an effective rate of 29.58%.
This rate applies to both Belgian companies (subject to Belgian CIT) and Belgian PEs of foreign companies (subject to Belgian non-resident CIT). Capital gains on qualifying shares realised without meeting the one-year holding requirement are taxed at 25.50% (25% plus a 2% crisis tax, which can be offset against available tax losses), provided certain conditions are met. Capital gains on non-qualifying shares are subject to the 29.58% rate.
As of tax year 2021 (financial years ending 31 December 2020 and later), the standard CIT rate is lowered to 25%, without any crisis tax (which will be abolished). Capital gains on qualifying shares realised when meeting all conditions remain fully exempt. Non-qualifying shares will be subject to the 25% rate.
Small and medium-sized enterprises (SMEs) (based on article 15 of the Companies Code or article 1:24 of the new Code for Companies and Associations and provided several other conditions are met) will be able to profit from a decreased rate of 20% plus a 2% crisis tax, implying an effective rate of 20.40% on the first bracket of 100,000 euros (EUR) profit.
As of tax year 2021 (financial years ending 31 December 2020 and later), this rate amounts to 20%, as the crisis tax will be abolished.
Belgian income tax bands
Up to €13,250 - 25%
€13,250–€23,390 - 40%
€23,390–€40,480 - 45%
€40,480 - +50%