A company is a resident of Belgium for tax purposes if it has its principal place of business or its seat of management in Belgium. The seat of management has been defined by Belgian case law as the place from where directing impulsions emanate or the place where the company's effective management and central administration abide, meaning the place where the corporate decision-making process actually takes place.
Although in company law the 'registered seat' theory has become the new general rule since the reform of Belgian company law in 2019, from a tax point of view, the 'real seat' theory remains applicable. Therefore, new definitions of 'companies', 'resident companies' (combined with a rebuttable presumption to avoid situations of double non-residence), and 'foreign companies' have been introduced in the Belgian Income Tax Code.
Permanent establishment (PE)
The definition of a Belgian establishment under Belgian domestic tax law corresponds, but is broader than, the definition of a PE under either the OECD Model Tax Convention or Belgium’s DTTs. Since the latter prevail over domestic law, Belgium generally cannot levy tax if a non-resident has a Belgian establishment that does not constitute a PE under the relevant DTT. Although Belgium would not be entitled to tax the profit attributable to the Belgian establishment in such a case, the foreign company should still abide by certain formal tax requirements (e.g. filing a non-resident tax return, responding to requests for information).