Exemption from capital gains tax on equities
Capital gains realised by SMEs on the sale of equities may be exempt from tax if the issuer of the equities is subject to a normal tax regime and if the equities were previously held for an uninterrupted period of at least one year.
Maximum corporation tax of 6.8% on income from patents
Belgian companies or Belgian subsidiaries of foreign companies may deduct from their taxable profit 80% of income from any patents they hold.
Deduction for investments
Belgian SMEs investing in ordinary new assets may deduct from their taxable profit not only depreciation but also a further 8% of the investment value of these assets.
The following investments are eligible for higher rates of deduction:
Creation of a holding company
In addition to the advantageous tax regime on equities income, there is no registration duty on capital contributions and no tax on the holding company’s assets.
Creating a holding company simplifies the transmission of family businesses and considerably reduces the tax burden of such transfers.
Investment in a tax shelter – 310% exemption
The tax shelter is a fiscal incentive intended to promote the production of Belgian audiovisual and cinematographic works.
Using this mechanism, a company wishing to support audiovisual production in Belgium is entitled to an exemption from tax on its taxable profit reserves of 310% of the sums effectively invested.
Reduced rates of tax
The basic rate of corporation tax is 34% but companies whose taxable profit does not exceed €322,500 may be eligible for reduced rates on simple conditions:
Notional interest deduction
This is a tax deduction for risk capital that enables Belgian companies or Belgian subsidiaries of foreign companies to deduct from their taxable profit a notional interest calculated on the basis of their equity: the rate of deduction applicable in 2016 is 1.6310%.
VAT unit
The VAT unit is a legal notion enabling a group of companies (minimum of two) linked in financial, business and organisational terms to be considered as a single unit for VAT purposes.
The unit is required to submit a single periodic VAT return for all its members and intra-group operations are not liable to VAT.
The VAT unit is able to deduct or recover VAT on buildings let within the Group or to neutralise certain VAT costs for property professionals.
Lastly, the VAT unit allows for netting of VAT positions (some companies run a permanent VAT credit, while others have a permanent VAT liability) between members of the group, which can be financially highly advantageous.
2017-01-31 – K. VDN
