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Belgium Corporate - Withholding taxes

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Domestic corporations and PEs of foreign corporations paying dividends, interest, royalties, service fees, and/or certain rentals are required to withhold tax.

Capital reductions decided by the general meeting as of 1 January 2018 will be deemed to derive proportionally from paid-up capital, taxed reserves (incorporated and non-incorporated into capital), and exempted reserves incorporated into the capital. The reduction of capital will be allocated to paid-up capital in the proportion of the paid-up capital in the total capital increased by certain reserves. The portion allocated to the reserves is deemed to be a dividend and will become subject to WHT (if applicable). Share premium distribution is submitted to the same system.

A uniform WHT rate of 30% is applicable on dividends, interest, and royalties. There are some exceptions.

Some WHT reductions/exemptions are foreseen under Belgian domestic tax law.

  • A WHT exemption is foreseen for the distribution of profits made by a Belgian subsidiary to an EU parent company if both the parent and subsidiary have a legal form that is mentioned in the Annex to the EU Parent-Subsidiary Directive, if both are subject to CIT, and if the parent company holds, during an uninterrupted period of at least one year, a shareholding of at least 10% in the capital of the distributing company (implementation of the Parent-Subsidiary Directive). If the one-year holding requirement is not fulfilled at the time of distribution, the distributing company provisionally should withhold the amount of WHT due (but it does not have to pay the tax authorities). Once the one-year holding requirement is met, the provisionally withheld tax amount can be paid out to the parent company. If the one-year holding requirement eventually is not complied with (e.g. because the Belgian participation is disposed of by the parent company before the one-year holding requirement is met), then the Belgian company has to pay the amount provisionally withheld, increased by interest for late payment (at an annual rate of 7%, and a rate between 4% and 10% as of tax year 2019), to the competent services of the Belgian tax authorities.
  • Recently, a GAAR has been introduced into Belgian legislation. As a result, the WHT exemption will be denied whenever the dividends originate from legal acts or a whole of legal acts that are artificial (i.e. no valid business reasons that reflect economic reality) and merely in place to obtain the WHT exemption.
  • In 2012, the European Court of Justice ruled that the Belgian dividend WHT regime was incompatible with EU law (the ‘Tate & Lyle case’). The regime stated that dividends distributed by Belgian companies to foreign corporate shareholders having a holding interest in the capital of a company of less than 10% but with an acquisition value of at least EUR 1.2 million (currently EUR 2.5 million) are, in principle, subject to full withholding at 30%. According to the Act of 18 December 2015, dividends distributed by a Belgian company to non-resident minority corporate shareholders are now subject to a reduced WHT rate of 1.6995% (instead of 30%), provided certain conditions are met, among which are the following:
    • The reduced rate of 1.6995% is only applicable to the extent that the Belgian WHT cannot be credited or is not refundable in the jurisdiction of the beneficiary.
    • Both the company distributing the dividends and the beneficiary of the dividends are subject to a taxation condition.
    • The beneficiary must be a non-resident corporate shareholder having a holding interest in the capital of the distributing company of less than 10% but with an acquisition value of at least EUR 2.5 million.
    • The holding interest must be held for an uninterrupted period of at least one year (in full ownership).
    • The shareholder must be a company located in the EEA or in a jurisdiction with which Belgium has concluded a DTT.
    • The shareholder must have a legal form as mentioned in the EU Parent-Subsidiary Directive or a similar form.

    As of tax year 2019 (financial years ending 31 December 2018 and later), the special Tate & Lyle WHT rate is replaced by a WHT exemption.

  • The application of the Parent-Subsidiary Directive to dividend payments has been extended towards non-EU-resident companies. Dividends distributed towards a country that has concluded a tax treaty with Belgium containing a qualifying exchange of information clause can be exempt from WHT, subject to the same conditions as laid down in the Parent-Subsidiary Directive.

On top of the above exemptions, there are other dividend/interest exemptions/reductions implemented in Belgian tax law.

With respect to payments made to non-resident corporations or individuals, WHT exemptions and/or reductions can also be found in the DTTs concluded by Belgium.

Recipient WHT (%)
Dividends Interest Royalties, certain rentals (6)
Non-resident corporations and individuals:      
Non-treaty 30 30 30
Treaty:      
Albania 5/15 (4) 5 5
Algeria 15 (4) 15 (6) 5/15
Argentina 10/15 (4) 12 (6) 3/5/10/15
Armenia 5/15 (4) 10 (6) 8
Australia 15 (4) 10 10
Austria 15 (4) 15 (6) 10
Azerbaijan 5/10/15 (4) 10 5/10
Bahrain 10 (4) 5 (6) 0
Bangladesh 15 (4) 15 (6) 10
Belarus 5/15 (4) 0/10 5
Bosnia-Herzegovina (1) 10/15 (4) 15 10
Brazil 10/15 (4) 10/15 (6) 10/15/20
Bulgaria 10 (4) 10 (6) 5
Canada 5/15 (4) 10 (6) 0/10
Chile 0/15 (4) 5/15 5/10
China, People’s Republic of (2) 5/10 (4) 10 (6) 7
Congo 5/10 (4) 10 (6) 10
Croatia 5/15 (4) 10 (6) 0
Cyprus 10/15 (4) 10 (6) 0
Czech Republic 5/15 (4) 10 (6) 5/10
Denmark 0/15 (4) 10 0
Ecuador 15 (4) 10 (6) 10
Egypt 15/20 (4) 15 15/25
Estonia 5/15 (4) 10 (6) 5/10
Finland 5/15 (4) 10 5
France 10/15 (4) 15 0
Gabon 15 (4) 15 (6) 10
Georgia 5/15 (4) 10 (6) 5/10
Germany 15/25 (4) 0/15 0
Ghana 5/15 (4) 10 (6) 10
Greece 5/15 (4) 5/10 (6) 5
Hong Kong 0/5/15 (4) 10 (6) 5
Hungary 10 (4) 15 (6) 0
Iceland 5/15 (4) 10 (6) 0
India 15 (4) 10/15 20
Indonesia 10/15 (4) 10 (6) 10
Ireland, Republic of 15 (4) 15 0
Israel 15 (4) 15 10
Italy 15 (4) 15 (6) 5
Ivory Coast 15/18 (4) 16 (4) 10
Japan 5/15 (4) 10 10
Kazakhstan 5/15 (4) 10 (6) 10
Korea, Republic of 15 (4) 10 (6) 10
Kosovo (1) 10/15 (4) 15 10
Kuwait 0/10 (4) 0 10
Kyrgyzstan (3) 15 15 (6) 0
Latvia 5/15 (4) 10 (6) 5/10
Lithuania 5/15 (4) 10 (6) 5/10
Luxembourg 10/15 (4) 0/15 0
Macedonia 5/15 (4) 10 (6) 10
Malaysia 0/15 (4) 10 10
Malta 15 (4) 10 (6) 0/10
Mauritius 5/10 (4) 10 (6) 0
Mexico 0/10 (4) 5/10 (6) 10
Moldova (3) 15 15 (6) 0
Mongolia 5/15 (4) 10 (6) 5
Montenegro (1) 10/15 (4) 15 10
Morocco 6.5/10 (4) 10 (6) 10
Netherlands 5/15 (4) 10 (6) 0
New Zealand 15 (4) 10 10
Nigeria 12.5/15 (4) 12.5 12.5
Norway 5/15 (4) 15 (6) 0
Pakistan 10/15 (4) 15 (6) 0/15/20
Philippines 10/15 (4) 10 (6) 15
Poland 0/10 (4) 5 (6) 5
Portugal 15 (4) 15 10
Romania 5/15 (4) 10 (6) 5
Russia 10 (4) 10 (6) 0
Rwanda 0/15 (4) 10 (6) 10
San Marino 0/5/15 (4) 10 (6) 5
Senegal 15 (4) 15 10
Serbia (1) 10/15 (4) 15 10
Seychelles 5/15 (4) 5/10 (6) 5
Singapore 0/15 (4) 10 5
Slovakia 5/15 (4) 10 (6) 5
Slovenia 5/15 (4) 10 (6) 5
South Africa 5/15 (4) 10 (6) 0
Spain 0/15 (4) 10 (6) 5
Sri Lanka 15 (4) 10 (6) 10
Sweden 5/15 (4) 10 (6) 0
Switzerland 0/10/15 (5) 0/10 (5) 0
Taiwan 10 (4) 10 (6) 10
Tajikistan (3) 15 15 (6) 0
Thailand 15/20 (4) 10/25 (6) 5/15
Tunisia 5/15 (4) 5/10 (6) 11
Turkey 15/20 (4) 15 (6) 10
Turkmenistan (3) 15 15 (6) 0
Ukraine 5/15 (4) 2/10 (6) 0/10
United Arab Emirates 0/5/10 (4) 5 (6) 0/5
United Kingdom 0/10 (4) 10 (6) 0
United States 0/5/15 (4) 0/15 0
Uruguay 0/5/15 (4) 10 (6) 10
Uzbekistan 5/15 (4) 10 (6) 5
Venezuela 5/15 (4) 10 (6) 5
Vietnam 5/10/15 (4) 10 (6) 5/10/15

Notes

  1. The treaty concluded with ex-Yugoslavia is still applicable to Bosnia-Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia.
  2. Not applicable to Hong Kong.
  3. The treaty concluded with the former USSR is still applicable to Kyrgyzstan, Moldova, Tajikistan, and Turkmenistan.
  4. It concerns an EU country or the treaty contains a qualifying exchange of information clause. Hence, the rate of 0% is applicable subject to the same conditions as invoked by the Parent-Subsidiary Directive (see above). Where multiple rates apply, the difference is generally based on the percentage of participation the recipient holds (directly) in the capital of the company paying the dividends.
  5. Under the Bilateral II agreement concluded between Belgium and Switzerland, a rate of 0% is applicable under certain conditions.
  6. With respect to EU countries, a WHT exemption is applicable, provided that the conditions laid down in the Interest & Royalty Directive are met (see above). Furthermore, please note that some treaties contain an exemption for trade receivables or loans concluded with a governmental body.

The treaties that are currently in force are listed above. Based on the websites of the Belgian government, the following tax treaties are signed, modified, or under renegotiation (including some for the exchange of information clause): Botswana, Canada, Congo, India, Ireland, Isle of Man, Japan, Luxembourg, Macao, Malaysia, Malta, Moldova, New Zealand, Norway, Oman, Qatar, Russia, Rwanda, Tajikistan, Uganda, the United Kingdom, and Uzbekistan.


Last Reviewed - 14 December 2018

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