Belgium

Corporate - Branch income

Last reviewed - 02 February 2021

PE profits are subject to the normal tax rate for Belgian corporations plus the possible surcharge for absence/insufficiency of advance payments (see the Taxes on corporate income section). 

PE profits and capital gains on shares that do not meet the one-year holding period are subject to the standard CIT rate of 25% (or fully exempt for certain capital gains on qualifying shares if all conditions are met).

In general, the taxable basis is the difference between the profits actually realised and the tax-deductible costs actually incurred in the hands of the Belgian PE as determined from the separate set of accounts of the Belgian PE. No legal requirement exists to keep a separate set of accounts in the hands of the PE, unless there is a legal PE/branch in Belgium.

Should no separate set of accounts be kept, the taxable basis in the hands of the Belgian PE, in principle, can be determined on a lump-sum basis. As a result, the yearly taxable basis will be determined on 10% of the gross turnover realised in Belgium with a minimum of EUR 7,000 per employee (the minima vary between EUR 7,000 and EUR 24,000, depending on the kind of business) and an absolute minimum of EUR 40,000 in case of non or late declaration. Note that such determination of the taxable basis is often formalised in a written agreement with the local Belgian tax inspector without deviating from the tax law criteria as mentioned.