Tax law is frequently modified with minor adjustments, but significant changes to tax legislation typically occur twice a year through what are known as program laws. These laws are generally adopted in December (year-end budget) and in July (mid-year budget adjustment) and published in the Belgian Official shortly thereafter. In addition to program laws, substantive tax changes are regularly introduced through miscellaneous fiscal provisions acts, standalone reform acts, that are subsequently ratified by Parliament and Royal Decrees.

The legislative process varies depending on the body introducing a new measure. At the federal level, the Chamber of Representatives (Kamer van volksvertegenwoordigers) is responsible for adopting national fiscal legislation. Belgium also has regional parliaments (Flanders, Wallonia, Brussels-Capital), community parliaments, provinces and municipalities, each with distinct tax competencies.

Belgium’s legislative process can generally be described as follows: a government draft is submitted to the Chamber of Representatives and reviewed by the Council of State, discussions take place in a parliamentary commission where amendments can be proposed. After discussion in a plenary session the voting takes place. Once sanctioned by the King, the Act is published in the Official Gazette.

Corporate entities are required to file their annual corporate income tax returns via the Biztax platform within a strict deadline of seven months following the end of the financial year. As an exception to the general rule, the filing deadline is on September 30 of the current year, for financial years ending between 31 December of the year prior and 28 February of the current year. Belgian entities that are part of a multinational group also need to comply with the applicable transfer pricing documentation obligations if the thresholds are met.

Entities within the scope of the Pillar Two minimum tax (law of 19 December 2023) must file a GloBE Information Return (GIR). The deadline for filing the GIR in Belgium is 30 September 2026. This deadline has been extended to accommodate the implementation of the Pillar 2 rules, which require multinational enterprises to comply with a minimum effective tax rate of 15% on their profits. Additionally, the Qualified Domestic Minimum Top-up Tax (QDMTT) return and the Income Inclusion Rule (IIR) return have also been extended to the same date.

Individual taxpayers are likewise required to file their tax returns, with some exceptions where tax returns are pre-filled by tax authorities. Filing deadlines for paper submissions are generally on June 30, while Taxon-web submissions benefit from a later deadline on the 15^th of July. Taxpayers with specific categories of income — such as foreign, professional, or complex financial income — benefited from an extended deadline until October 16 of the current year.

If requested by the tax authorities, taxpayers are required to submit, without physical relocation, all books and documents necessary for the determination of the amount of taxable income and are compelled to answer questions and to grant access to the premises.

Tax law compliance in Belgium has become increasingly burdensome and complex. Each year, new forms, reporting obligations, and procedures add to the administrative burden for both taxpayers and their advisors. The Federal Public Service Finance (FPS Finance) website is the primary source of information regarding relevant forms, guidance, and electronic filing.

On a federal level, FPS Finance is the key authority. FPS Finance comprises seven General Administrations, the most relevant for taxpayers being: (i) the General Administration of Taxation responsible for the assessment of income taxes (corporate, personal, non-resident) and VAT; (ii) the General Administration of Customs and Excise, responsible for customs duties and excise taxes; (iii) the General Administration of Collection and Recovery, responsible for collecting and enforcing all federal tax debts; and (iv) the Special Tax Inspectorate (Bijzondere Belastinginspectie), responsible for complex fraud investigations. The General Administration of Taxation is organized into three target-group administrations: Individuals, Small and Medium-sized Enterprises, and Large Enterprises.At the regional level, the key authorities are the Flemish, Brussels and Walloon Tax Authorities, each competent for regional tax matters (such as real estate taxes, inheritance taxes, registration duties…). The regional tax authorities act independently from the Federal Public Service Finance (although some regional taxes are still levied by the federal authorities on behalf of the regions).

Local authorities (provinces and municipalities) also have autonomous taxation powers which they exercise under the administrative supervision of the regions.

The tax authorities have extensive investigation powers. Where a discussion arises during an audit, either an audit settlement can be found, or the domestic procedural route will be followed. The procedural route differs depending on the tax at issue — direct taxes or indirect taxes. When additional taxes are levied by issuance of an assessment notice (for direct taxes) or the registration of a recovery order (vat) an administrative and/or judicial dispute procedure is available to the taxpayer.

Where another jurisdiction is involved, the domestic procedure can be followed in parallel with available procedures based on international instruments. The domestic procedure must however be waived before the outcome of a MAP procedure will be implemented. With regard to federal taxes and Flemish regional taxes, taxpayers can apply for an advance ruling with the Office for Advance Tax Rulings as regards the tax consequences of a transaction or a situation. The period to obtain a ruling decision may vary depending on the matter. On average, it takes a minimum of 3 to 6 months. Multinational companies can request bilateral/multilateral APAs for cross-border transactions (transfer pricing or allocation of profits to permanent establishments).

For federal income taxes, the dispute resolution process involves two phases:

Administrative phase. The taxpayer must first file a written objection with the advisor-general of the competent tax administration within one year from the third working day following the date of dispatch of the assessment notice. During this phase, the taxpayer may apply for the intervention of the Tax Conciliation Service, an entity within FPS Finance that operates autonomously and acts as an impartial mediator between the tax authorities and the taxpayer.

The advisor-general must issue a reasoned decision on the objection. There is no mandatory deadline to issue this decision, but if six months have passed without a decision (nine months if the assessment was established ex officio), the taxpayer may initiate court proceedings.

Judicial phase. A negative administrative decision (or the absence of a decision on the tax claim as explained above) can be challenged by filing a petition before the Court of First Instance within three months as of the issuance of the negative decision.

The Court of First Instance has unlimited jurisdiction to examine the substance of the case. Its judgment may be appealed to the Court of Appeal, whose decision may in turn be challenged before the Court of Cassation on points of law only.

For refund claims of non-enrolled withholding taxes (payroll withholding tax and movable withholding tax), an objection must be filed within five years (or three years for certain exemptions from withholding tax remittance) from 1 January of the year in which the withholding tax was paid.

Under specific circumstances — such as clerical errors, double taxation, or if new factual elements or documents become available — the taxpayer can apply for ex officio relief within a period of five years from 1 January of the year in which the assessment was established.

Duration. The duration of proceedings varies significantly depending on the jurisdiction and complexity. The administrative phase typically takes 6 to 18 months. Court proceedings before the Court of First Instance can take 1 to 3 years in most jurisdictions; appeals to the Court of Appeal add a further 1 to 2 years (except for the Court of Appeal of Brussels which deals with a structural backlog).

For VAT disputes, there is no mandatory prior administrative objection. The taxpayer can either file a voluntary administrative appeal or bring the dispute directly before the Court of First Instance.

The procedural rules on the administrative level are different for indirect taxes and for regional and local taxes.

The deadlines for the payment of taxes in Belgium can vary depending on the type of tax and the specific circumstances of the taxpayer.

Belgian companies are encouraged to make quarterly prepayments on their corporate income tax. Companies that fail to make sufficient prepayments are subject to a tax surcharge on their final tax liability. After the corporate income tax return is filed and processed, any supplement due must be paid within two months following the dispatch of the assessment notice

If the company is registered for VAT, it must file regular VAT returns and simultaneously pay the VAT due, typically on a monthly or quarterly basis, depending on the volume of its business activities.

Tax assessments remaining unpaid after the two-month period has elapsed will result in late payment interests that are due. The rate for late payment interests this year is 4%. This rate must be increased by 4% to determine the late payment interest rate on outstanding VAT amounts. Hence, the applicable late payment interest rate for VAT currently amounts to 8% per year.

For disputed amounts of tax, special rules apply. If a tax claim is filed, no enforcement measures can be taken by the tax authorities to oblige the taxpayer to pay the disputed amount of the tax, until the dispute has been resolved. However, conservatory measures such as withholding of VAT credits are still possible. The filing of a tax claim suspends the accrual of late payment interest on the disputed portion of the tax, starting from the expiration of a six-month period following the submission of the claim, until the notification of the decision or the initiation of judicial proceedings.

When taxes are subsequently refunded to the taxpayer (e.g. following a successful objection or court decision), moratorium interest is owed by the state at a rate which is currently determined at 2% per annum under certain conditions determined by law.

Tax authorities in Belgium are subject to a duty of confidentiality when it comes to taxpayer data and must process taxpayers’ personal data in accordance with the provisions of the General Data Protection Regulation, abbreviated as ‘GDPR’. Belgian tax authorities are also bound by professional secrecy, which is also enshrined in the Income Tax Code, based on which they are prohibited from disclosing taxpayer information to third parties without proper authorization or legal basis and to which a breach is punishable as a criminal offence.

Belgium is a signatory to the Common Reporting Standard (CRS) and has implemented CRS into its legislation by Act of 16 December 2015 in view of obliging Belgian financial institutions to yearly file the required information through a dedicated electronic platform. In principle, CRS reporting must be submitted to FPS Finance by 30 June of the year following the calendar year concerned. Each year, a Royal Decree updates the list of reportable jurisdictions and participating jurisdictions. (most recently, the Royal Decree of 10 May 2026 for calendar year 2025).

The CRS framework continues to evolve. The Act of 16 March 2026 (B.S. 01.04.2026) transposed EU Directive 2023/2226 (DAC 8), introducing new reporting and due diligence obligations for crypto-asset service providers (articles 326/12–326/18 WIB 92), applicable from 11 April 2026 with due diligence on existing users to be completed by 1 January 2027. This framework — aligned with the OECD’s Crypto-Asset Reporting Framework (CARF) — covers reportable crypto-assets (excluding electronic money and central bank digital currencies) and requires providers to identify and report users with a tax residence in a reportable jurisdiction. Belgium has also committed to implementing the broader OECD revised CRS from 2027 onwards, which strengthens due diligence and reporting obligations for financial institutions.

Regarding the maintenance of a public register of beneficial ownership, Belgium has implemented the EU’s fourth and fifth Anti-Money Laundering Directive (EU Directive 2015/849 and EU Directive 2018/843), which requires the establishment of registers of beneficial ownership for legal entities.

Companies and other entities are required to collect and hold information on their beneficial owners. The register should contain at least their name, date of birth, nationality, and country of residence, as well as the nature and extent of the beneficial interest held. In addition to the initial registration of the UBOs, every change must be updated within the month and, moreover, the accuracy of the information must be confirmed annually.

A company is considered a resident of Belgium for corporate law purposes if it has its registered seat in Belgium. This is different for tax purposes (cfr. 19).

Belgium implemented BEPS 13 into domestic law providing for the mandatory filing of transfer pricing documentation in line with the principle of the three-tiered approach (master file, local file and countryby-country report) for Belgian entities of Multinational Groups meeting the thresholds determined by the law. A penalty regime is provided for non-compliance with the formalistic documentation requirements. Recently enhanced reporting requirements apply for financial years starting on or after 1 January 2025.

From 2024, both multinational corporations and independent companies operating within the EU will also need to enhance their tax transparency efforts. This will involve the preparation, submission, and public disclosure of a country-by-country report (CbCR) that includes specific tax and financial details. This CbCR is public and is applicable to financial years starting on or after 22 June 2024. Belgium has a special transfer pricing investigation unit with a mission to (i) build up and share transfer pricing expertise and (ii) carry out in-depth transfer pricing audits of multinationals present in Belgium through a subsidiary or permanent establishment. The number of transfer pricing audits being initiated in Belgium has increased significantly. In general, companies are selected for transfer pricing audits based on data mining techniques.

The Belgian tax authorities are regularly participating in multilateral audits with tax authorities of other European member states.

A specific reporting obligation also exists for direct or indirect payments, equal to or exceeding EUR 100,000 during the tax year, made by companies subject to Belgian CIT or Belgian non-resident CIT to recipients established in tax havens. The reporting must be made on a special form to be attached to the (non-resident) CIT return.

In practice, the tax authorities have shown an increased focus on passive income flows (dividends, interest and royalties), beneficial ownership issues, cross-border reporting obligations, and alleged tax abuse through the involvement of intermediary entities lacking economic substance.

For corporate income tax purposes, CFC rules apply when (i) a Belgian company owns (alone or together with associated companies) more than 50% of the capital, voting rights, or rights to profits of a foreign entity (participation condition), and (ii) the foreign entity either is not subject to tax under the applicable rules of its residence state or is subject to income tax that is less than half of the CIT of the CFC computed based on Belgian rules (taxation condition). A foreign entity established in a jurisdiction that, at the end of the taxable period, is included in the EU list of noncooperative jurisdictions is deemed to fulfill the second condition.

Since assessment year 2024, Belgium opted for the first option of the ATAD (model A), which focuses on the taxation of undistributed passive income subject to low taxation abroad in proportion to the direct investment of the Belgian entity in the Controlled Foreign Company.

The Belgian corporate taxpayers must disclose the existence of the CFC and an additional tax could arise on the undistributed passive income of the foreign participation. Other safe harbor rules apply as well.

The taxpayer can nevertheless prove that sufficient substance is available to avoid additional tax.

Belgium also has a sort of CFC regime applicable for personal (as well as legal entities) income tax purposes called the “Cayman tax”. This regime organises a look-through taxation of Belgian resident individuals who are deemed founders of a so-called foreign “legal arrangement”. Legal arrangements encompass different kinds of structures considered as non- or low-taxed (trusts, foundations, companies with legal personality which don’t meet a certain level of taxation, etc). This regime also provides for a substance carve out.

The arm’s-length principle is formally codified in the Belgian Income Tax Code (BITC). A Belgian circular of 25 February 2020 provides an overview of the OECD transfer pricing guidelines for multinational enterprises and tax administrations.

In addition, the tax authorities can make use of other, more general, provisions in the BITC to assess the arm’s length nature of transfer prices (e.g. the general rules on the deductibility of business expenses). The BITC contains provisions that tackle artificial inbound or outbound profit shifting. These are the so-called provisions on abnormal or gratuitous benefits.

Belgian tax law provides for a general thin capitalisation rule (5:1 debtequity ratio) according to which interest payments or attributions in excess of a 5:1 debt-equity ratio are not tax deductible.

The thin capitalisation rule existed until and including tax year 2019. As of tax year 2020 (financial years ending 31 December 2019 or later), the EBITDA-based rule applies.

However, the thin capitalisation rule remains applicable in case of (i) grandfathered loans (i.e. loans granted before 17 June 2016, in case no ‘fundamental’ modifications have been made) and (ii) interest paid to a beneficiary located in a tax haven.

The EBITDA-based rule is in line with the EU Anti-Tax Avoidance Directive (ATAD) I requirements. Exceeding borrowing costs are only tax deductible up to the highest of (i) 30% of the taxpayer’s fiscal EBITDA or (ii) EUR 3 million. The exceeding borrowing costs that could not be deducted in the current taxable period can be carried forward for an unlimited time. Furthermore, upon certain conditions, taxpayers belonging to the same group also have the possibility to transfer unused EBITDA capacity to other group companies.

Advance pricing agreements (APAs) can be concluded (unilaterally, bilaterally, and multilaterally) via which the taxpayer can obtain upfront certainty.

Yes, Belgian tax law foresees a general anti-avoidance rule (in income tax matters as well as in other tax matters, e.g. inheritance taxes and registration duties). Under the general anti-abuse provision, legal acts or a set of legal acts are not enforceable in the case of tax abuse. Tax abuse occurs when the taxpayer performs an act in which he places himself in a situation contrary to the objective of a legal provision or claims a tax advantage which contradicts the provision’s objectives.

If the tax authorities provide proof that the legal act or the whole series of legal acts has been chosen with a view to obtaining a tax advantage, it is up to the taxpayer to prove that the choice for his legal act or the set of legal acts is justified by motives other than avoiding income taxes. If the taxpayer does not provide proof to the contrary, the taxable basis and the tax calculation will be restored in such a way that the transaction is subject to taxation in accordance with the purpose of the law as if the abuse had not occurred.

Belgium has traditionally supported a multilateral solution through the OECD Pillar One project rather than a unilateral DST. However, the federal coalition agreement provides that, if no European or international agreement is reached by 2027, Belgium may introduce a 3% DST.

Belgium has given effect to the great majority of the BEPS actions, although through different channels — domestic legislation, treaty amendment via the Multilateral Instrument, and administrative guidance. Of the 15 BEPS actions in total, 12 BEPS recommended changes have already been implemented into Belgian tax law: Action 2 (Hybrid mismatch arrangements); Action 3 (Controlled Foreign Companies regimes); Action 4 (Financial payments); Action 5 (Harmful tax practices); Action 6 (Tax treaty abuse); Actions 8-10 (transfer pricing); Action 12 (Mandatory disclosure of aggressive tax planning); Action 13 (Transfer pricing documentation); Action 14 (Dispute resolution mechanism); and Action 15 (MLI).

On 24 December 2023, the Belgian government approved the law introducing a global minimum tax for multinational companies and large domestic groups. This is the Belgian transposition of the Council Directive (EU) 2022/2523 ensuring a global minimum level of taxation for MNE and large domestic groups in the European Union.

With the entry into force of the law on 31 December 2023, Belgium implemented all three charging mechanisms to get to a minimum tax rate of 15% : the qualified domestic minimum top-up tax (QDMTT), the qualified income inclusion rule (IIR) and the qualified undertaxed profits rule (UTPR). Companies within the scope of Pillar Two need to consider advance tax payments for Pillar Two.

Multinational enterprise groups and large-scale national groups subject to the minimum tax introduced by the law of 19 December 2023 must register with the Crossroads Bank for Enterprises (CBE). To do so, these groups need to notify FPS Finance using a form available on MyMinfin. This notification must be completed within 30 days after the start of the tax year for which the group falls under the scope of the new law.

Belgium opted to apply the tax prepayment schedule applicable for corporate income tax to Pillar Two top-up taxes under the (Qualified) Domestic Minimum Top-up Tax ((Q)DMTT) and Income Inclusion Rule (IIR). In the event that no advance tax payments would be made, a surcharge of 9% of the top-up taxes will be due.

DAC 9 (Directive (EU) 2025/872 of 14 April 2025) was adopted to enable central filing of the GloBE Information Return and its exchange between Member States. The framework has since been amended so as to replace the return-based mechanism for IIR and UTPR purposes with an information report (informatierapport), and implementing decrees have established the GloBE Information Return and the notification model for the electronic platform.

Belgium has been an advocate of the BEPS action plan from the start resulting in a rather smooth transposition of almost all action points without substantial deviations from the EU-Directives on those matters. The BEPS action plan is in line with the Belgian tax policies to cooperate constructively in tackling international tax avoidance through base erosion and profit shifting.

Yes, Belgium follows the OECD model and has implemented the following taxation principles (high level and non-exhaustive):

Individual income taxation:

Residents of Belgium are taxable on their worldwide income, while nonresidents are only taxable on Belgian-source income. Certain exemptions may apply for foreign income.

Types of income include a.o. employment income, pension income, income from operating a business as a natural person, movable (investment/savings) income (such as dividends, interest and/or royalties), capital gains, certain qualifying miscellaneous income and income from immovable property.

As a general rule concerning income derived from employment, pensions and operating an independent business, taxation is charged on a sliding scale to successive portions of net taxable income. For income year 2026, the federal tax rates range between 25% and 50%, with an exemption under a certain threshold.

For residents of Belgium, communal taxes are levied at rates varying from 0% to 9% of the income tax due. For non-residents, a flat surcharge of 7% is due. In some cases, communal taxes may also be levied on exempted foreign-source income.

In general, movable income, investment (including royalties) and/or savings income, is taxed at a separate rate for which the general rate is considered at 30% (withholding tax).

For miscellaneous income the rates usually vary between 16,5% and 33% depending on the specific type of income.

Historically, capital gains realised by individuals on financial assets within the normal management of their private estate were not taxable in Belgium. The Law of 6 April 2026 introduced a capital gains tax on financial assets, applying to gains realised as from 1 January 2026. Under this new regime, capital gains are formally classified as miscellaneous income (diverse inkomsten/revenus divers) under article 90, first paragraph, 9°, c) WIB 92. The regime distinguishes three categories of capital gains realised outside the exercise of a professional activity and within the normal management of private assets upon a transfer for consideration :

• Internal capital gains (Type A): gains realised on the transfer of shares to a company over which the transferor (alone or together with close family members) exercises control are taxed at 33%.
• Substantial shareholdings (Type B): gains realised on shares (other than Type A internal capital gains) where the transferor holds at least 20% of the rights in the company are taxed at progressive rates 1.25% (EUR 1–2.5 million), 2.5% (EUR 2.5–5 million), 5% (EUR 5– 10 million) and 10% (above EUR 10 million). The first tranche of EUR 1,000,000 is exempt (assessed over a five-year period).
• General category (Type C): a flat rate of 10% applies to gains on financial assets which do not fall under Type A or B. Financial assets are broadly defined so as to include shares and comparable instruments, debt instruments, units in collective investment undertakings, derivatives, crypto-assets and certain insurance-based investment products. Real estate and tangible assets such as gold, art and collectibles fall outside its scope. An annual exemption of EUR 10,000 (indexed) applies and the first EUR 1,000 (indexed) of any unused portion may be carried forward for up to five years.

Only gains accrued as from 1 January 2026 are targeted: the value of the asset as at 31 December 2025 constitutes the deemed acquisition base, with specific valuation rules for listed and unlisted holdings, so that gains accrued before that date remain untaxed. For transfers occurring up to 31 December 2030, the taxpayer may elect instead to use the actual historical acquisition cost if this can be evidenced.

Losses are deductible from gains within the same period and within the same category (A, B or C).

The pre-existing regimes are unaffected: gains realised outside the normal management of private assets remain taxable as miscellaneous income at 33% (plus communal taxes) and gains realised in a professional capacity remain taxable at progressive rates.

As regards collection, Belgian financial intermediaries are required to withhold the tax at source on certain capital gains from Type C (as movable withholding tax) from 1 June 2026 onwards. The taxpayer may elect to opt out of withholding, in which case the gain must be reported in the annual personal income tax return. A transitional mechanism applies for gains realised between 1 January and 31 May 2026. Gains realised through foreign intermediaries must in all cases be reported by the taxpayer. The benefit of the annual exemption, of the deductibility of capital losses and of a higher acquisition value must be claimed through the tax return though.

Local property tax is assessed on ‘cadastral income’, i.e. the deemed rental value attributed to the property by the authorities. If the property is rented to a physical person which uses the property for professional purposes, a taxation will take place in relation to the rental income.

Resident taxpayers who own real estate abroad must report their foreign property in their Belgian tax return.

Corporate tax:

In general, the tax base for CIT purposes is determined on an accrual basis and 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 25%. This rate applies to both Belgian companies (subject to Belgian CIT) and Belgian permanent establishments (PEs) of foreign companies (subject to Belgian nonresident CIT).

Small and medium-sized enterprises (SMEs) (subject to conditions) are able to benefit from a reduced rate of 20% on the first bracket of EUR 100,000 profit.

A minimum tax base applies for companies with a taxable profit that exceeds EUR 1 million via the limitation of certain deductions.

Capital gains on qualifying shares realized when meeting all conditions are fully exempt, while non-qualifying shares are subject to the 25% rate. VAT:

The following transactions are subject to VAT in Belgium if they are considered to take place in Belgium:

• The supply of goods and services affected for consideration by a taxable person acting as such.
• The acquisition of services for consideration from outside Belgium between taxable persons.
• The importation of goods.
• Intra-Community acquisition of goods for consideration by a taxable person acting as such or by a non-taxable legal person (including the transfer of assets).
• The self-supply by a taxable person.

The standard VAT rate is 21%. This rate applies to all goods and services not qualifying for one of the reduced VAT rates (12% and 6%).  Registration duty:

Purchases and transfers of real estate located in Belgium, including buildings (except new buildings, which are subject to VAT), are subject to a registration duty of in principle 12/12,5% depending on the region where the real estate is located. Lower rates may be applicable. For example, in Flanders, a 2% rate applies to the purchase of a sole and own residence used as a family home. In Wallonia, a 3% rate has been applicable since 1 January 2025 for first-time buyers, subject to certain conditions.

Registration duties are regional taxes and may vary in the 3 regions (Brussels, Flemish, Walloon region).

In general, the tax base for CIT purposes is determined on an accrual basis and 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. The income tax base is based on the Belgian Generally Accepted Accounting Principles (GAAP) financial statements of the company.

For a company to be subject to corporate income tax, three cumulative conditions need to be fulfilled:

• the company needs to have legal personality;
• the company is engaged in profit-making activities; and
• the company has its legal seat, main establishment or place of effective management in Belgium.

Hence, all companies, associations, cooperatives, limited partnerships on shares, organizations or establishments which have legal personality and which are engaged in profit-making activities or in the operation of a business in Belgium are subject to corporate income tax. Certain entities, however, may qualify as an entity with legal personality for legal purposes but not for tax purposes.

Limited partnerships, economic interest groupings (EIGs) and European economic interest groupings (EEIGs) are not recognized as separate taxpayers and, generally, their profits are taxed in the hands of the partners (tax transparency).

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. A company having its statutory seat in Belgium is presumed to have its principal establishment or seat of management in Belgium. This presumption is rebuttable.

Whether the principal establishment is located in Belgium is a question of fact, assessed on the basis of all relevant circumstances.

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.

No favorable taxation regimes exist in relation to particular areas.

Deviating taxation regimes may exist in relation to certain types of activities but are in general considered to be limited (e.g. diamond sector, shipping sector…).

Investment and/or pension funds with legal personality could be taxable in the same manner as they are subject to corporate income tax, but their taxable base only includes exceptional or gratuitous benefits received and costs and expenditure are not deductible as professional costs (excluding capital losses and impairments on shares). Consequently, dividends, interest, capital gains on real estate assets or rental income received by these funds are not taxed.

Investment and/or pension funds without legal personality are in principle tax transparent and no separate taxed entities. Therefore, Income derived by these investment/pension funds is, with a few exceptions, subject to withholding tax to be collected by the Belgian issuer or its paying agent, or, for foreign-source income, by the management company or the first Belgian financial intermediary which receives such income on behalf of the fund. Income paid to the investors by the investment funds is exempt from withholding tax as the withholding tax has already been levied on payment of the income to the fund itself.

Investment deductions

The investment deduction is a deduction from the tax base in addition to the normal tax depreciation on, amongst others, qualifying patents, environmentally friendly R&D investments, and green and sustainable investments.

The Belgian investment deduction regime has recently undergone a revision by the Law of 12 May 2024. The new regime is applicable for investments made as of 1 January 2025.

The new regime is organised around three “tracks”:

• The general track: ordinary investment deduction (10% or 20%) on qualifying digital investments. This is only applicable to individuals and SMEs.
• The targeted track: an increased “thematic” investment deduction ( (40%). A list of eligible investments for this investment deduction is published by Royal Decree (and will be reviewed / updated periodically). It covers investments in renewables energies, CO2 free transport, environment friendly investments and supporting digital investments. The technology track: the so-called “technology” deduction applies to qualifying investments in patents and fixed assets which are used to support research and development of new products and future-oriented technologies that have no impact on the environment or that aim to minimize the negative impact on the environment of existing products and technologies (13,5% (one-off) or 20,5% (spread, not applicable to patents)). Taxpayers could opt to apply a refundable tax credit for this category of investments (see below).

The law provides fixed investment deduction rates and will no longer be subject to the yearly indexation mechanism.

A taxpayer can only choose one of the above-mentioned types of investment deduction per fixed asset.

The general conditions to benefit from the investment deduction remain the same.

Going forward, unused investment deductions are indefinitely carryforwardable in time without any yearly restrictions applicable.

Patents and R&D tax credit

As an alternative for the above investment deduction for patents and R&D, a company may opt for a tax credit for which the advantage corresponds to the advantage of the investment deduction (i.e. 13,5% one-time and 20,5%)), multiplied by the normal CIT rate of 25%. The investment deduction implies a deduction of the taxable basis, while the tax credit is a reduction of the tax due. A key advantage of the tax credit for patents and R&D is that it is refundable if it has not been deducted for four subsequent tax years.

As of assessment year 2025, taxpayers can choose either to fully credit the tax credit for research and development against corporate income tax or to carry it forward according to the rules specified in the law.

Reduced wage withholding tax for qualifying researchers

A partial (maximum 80%) wage withholding tax exemption for research and development (R&D) is available in Belgium. This exemption can be applied by companies if the following (cumulative) conditions are met: the applicant must execute R&D activities, the R&D projects must be notified with Belspo (the Federal Public Planning Service Science Policy, one of the main actors of scientific research in Belgium) prior to starting their execution and the employees need to be in the possession of a qualifying degree (PhD, master’s or bachelor’s degree in (applied) sciences, engineering…). If the R&D activities are not notified in the Belspo portal prior to the application of the exemption by the applicant, a penalty of nullity of the applied exemption for the full duration of the particular R&D activities will be imposed.

Since mid-2023, the yearly notification with Belspo has been revised towards one notification for the duration of the R&D activities. This should, however, be updated annually. Furthermore, it is now also mandatory for applicants of the measure to prove they have installed fitting internal processes regarding the application of the exemption.

Content wise, a project or program can be considered as R&D if it falls within the scope of the definition of scientific research as foreseen by the Belgian legislator.

Innovation income deduction (IID)

The IID is based on Action Point 5 of the OECD BEPS Action Plan (applying the so-called ‘modified’ nexus approach) and replaces the (previous) Belgian patent income deduction (PID) regime, which was grandfathered for five years (until 30 June 2021).

The qualifying patent/innovation income is calculated on a net basis and depends on the level of qualifying activities (the so-called modified nexus ratio). The percentage of this deduction is raised from 80% under the (old) PID regime to 85% under the IID regime, resulting in an effective tax rate of 3.75% over the lifetime of the intellectual property (IP). As from assessment year 2025, companies may also elect not to apply all or part of the deduction even where profits are sufficient — an option introduced principally to allow groups within the scope of Pillar Two to manage their effective tax rate.

The IID can apply to income derived from certain intellectual property (such as patents and qualifying software) of which the company or branch has the full ownership, co-ownership, usufruct, or license of or right to use.

Under the IID regime, the benefit is available as of the date the patent is requested (and provided that the patent is actually granted afterwards).

Without making any restrictions to SMEs, the following income is considered as derived from the above qualifying IP in so far as the remuneration is included in the Belgian taxable result of the Belgian company or branch concerned:

• License fees.
• IP income embedded in the sales price of own manufactured products for which a third party would be willing to pay a license (socalled ‘embedded’ royalties).
• IP income derived from process innovation.
• Remunerations on the basis of a court/arbitral decision, an amicable settlement, or an insurance settlement.

Furthermore, the proceeds from a transfer of qualifying IP are also in the scope of the deduction, subject to a reinvestment condition to be met within five years.

Belgium does not have a full fiscal consolidation regime. Instead, it applies the group contribution regime. This regime, is a form of tax consolidation (light) under which Belgian companies (and Belgian permanent establishments of foreign companies) may offset the taxable profits of one group company against the current-year tax losses of another group company, provided certain conditions are met such as:

• A 90% direct shareholding between the group companies (or via a common parent company) is required, limiting the scope to the parent, subsidiary, and sister companies and their Belgian PEs.
• The measure is limited to group companies that have been affiliated for at least the last five successive financial years.
• Some companies, such as investment companies and regulated real estate companies, are excluded.

The federal coalition agreement announced a further relaxation of the group contribution regime, including the possibility for indirect shareholdings and newly established group entities to access the regime, as well as allowing the dividends received exemption (DRD) to apply to profits resulting from a group contribution. However, these measures still require legislative implementation.

The group companies must compensate each other for the tax burden of the group contribution; because of which, the tax consolidation is financially neutral on a group level. Transferred taxable profits can only be offset against current-year tax losses and not against carried forward tax losses that have been generated in the past. The scope of the tax consolidation regime is limited to certain qualifying companies and subject to various conditions. To benefit from the group contribution regime, the group companies concerned have to conclude a so-called ‘group contribution agreement’ that meets several conditions.

Yes. Domestic corporations and PE’s of foreign corporations paying dividends, interest, royalties, service fees, and/or certain rentals are required to withhold tax. In principle a 30% withholding tax is levied on the income from movable property and capital. Some WHT reductions/exemptions are foreseen under Belgian domestic tax law. With respect to payments made to nonresident corporations or individuals, WHT exemptions and/or reductions can also be found in the DTTs concluded by Belgium.

Belgium also foresees in the specific form of a ‘wage’ withholding tax to which wages, pensions, interests or allowances paid to employees and directors (resident or non-resident) are subject. Under strict conditions, however, the law foresees some exceptions (e.g. a tax exemption/reduction). The compliance of these favorable tax regimes with the legal conditions is quite often under scrutiny of the Belgian tax authorities.

Immovable property is subject to an immovable WHT (also called ‘real estate tax’) due on a yearly basis to the region in which the property is located. This tax is calculated as a percentage of the so-called ‘cadastral income’ of the property (a kind of ‘deemed’ rental income). This deemed rental income should constitute the average normal net income of one year (based on rental incomes of similar properties in 1976). Since the cadastre has not been updated since 1976 and since this merely concerns a fictitious income, this ‘deemed’ rental income can only be considered as a presumed income, which generally will not match the actual income the immovable property could generate.

The tax rate depends on where the property is located (as it is a combination of regional, provincial, and communal tax).

Machinery and equipment can also be considered as immovable property if certain conditions are met (e.g. sustainable connection to the property although intrinsically being movable property).

Both at federal and regional level, environmental taxes are levied. Federal environmental taxes include amongst others, packaging levies, excise duties levied on certain energy products (petrol, gas, etc.) and electricity.

At a regional level, environmental taxes are mostly levied on different kinds of waste and winning and discharging of water.

Following regulations at the EU level (Regulation 2023/1773 of 17 August 2023), establishing a Carbon Border Adjustment Mechanism (CBAM), the Belgian legislator has recently implemented the legislation in this regard as well.

CBAM initially applies to certain imported goods from the most carbonintensive industries. During the transitional period (from October 1, 2023, to December 31, 2025), importers of CBAM goods (or their indirect customs representatives) must submit a quarterly CBAM report to the European Commission which was due for the first time on 31 January 2024. Starting 1 January 2026, the obligations expanded to include the submission of an annual CBAM declaration and the purchase of CBAM certificates.

It should be noted that these obligations have in the meantime been simplified at EU level. Under the “Omnibus I” simplification package, a new mass-based de minimis threshold of 50 tonnes of CBAM goods per importer per year has been introduced, replacing the previous valuebased threshold of €150 per consignment. Importers not exceeding 50 tonnes per year are therefore exempt (the threshold does not apply to electricity and hydrogen, which remain in scope). This is expected to exempt approximately 90% of importers — mainly SMEs and individuals importing small quantities — while still capturing around 99% of embedded emissions.

For importers remaining in scope, the definitive regime applies to goods imported from 1 January 2026, from which date importers must hold (or have applied for) authorised CBAM declarant status. However, the sale of CBAM certificates has been deferred to 1 February 2027, and the first annual CBAM declaration — covering 2026 imports, together with the surrender of the corresponding certificates — is due by 30 September 2027.

Finally, environmental taxation on vehicles is structured to encourage the transition to cleaner mobility, particularly through fiscal incentives and penalties based on CO₂ emissions.

Dividends received by a Belgian company are first included in its taxable basis on a gross basis when the dividends are received from a Belgian company or on a net basis (i.e. after deduction of the foreign WHT) when they are received from a foreign company.

Provided certain conditions are met, 100% of the dividend income can be offset by a Dividends Received Deduction (DRD). Any unused portion of the DRD from dividends received from a European Economic Area (EEA) subsidiary or a subsidiary from a country with which Belgium has concluded a DTT with a non‑discrimination clause on dividends can be carried forward to future tax years (taking into account the possible limitations). The same also applies for dividends from Belgian subsidiaries.

The DRD is subject to a (i) minimum participation condition (Hold at least 10% of the share capital of the distributing company, or hold an acquisition value of at least EUR 2.5 million in the participation.; a (ii) taxation condition and a (iii) minimum holding period of one year.

Since the 2026 tax year (income year 2025), the participation condition has been amended: if a company that does not qualify as a small company holds a participation of less than 10% but with an acquisition value of at least EUR 2.5 million in another company, the participation must have the nature of financial fixed assets in order to benefit from the DRD on dividends received and capital gains realized on those shares.

The taxation condition not only includes the prerequisite that dividends should be received from a normally taxed company (this means (1) subject to a corporate tax regime similar to that in Belgium; (2) not established in a country with a significantly more advantageous tax regime, presumed when the nominal or effective tax rate is below 15%; and (3) not established in a jurisdiction on the EU list of non-cooperative jurisdictions, but several other specific requirements and/or specific antiabuse conditions are equally applicable.

It is worth noting that in March 2025, the Court of Justice ruled that the prohibition on deducting DRD in the context of intra-group transfers is incompatible with the EU Parent-Subsidiary Directive (Case C-135/24).

This judgment is part of a long line of decisions, starting with Cobelfret (C-138/07), pointing in the same direction: Belgium may choose to apply the exemption method under the Parent-Subsidiary Directive in the form of a ‘deduction’, but the outcome must be equivalent to that of a ‘true exemption’. A legislative amendment aimed at eliminating the incompatibility identified by the Court is to be expected.

Alongside its strategic geographic position at the heart of Europe, Belgium hosts significant political and international institutions, such as the European Union, NATO, the World Customs Organization, and Eurocontrol. This central location, combined with excellent logistical infrastructure and a highly skilled, multilingual workforce, makes Belgium an attractive gateway to the European market. From a tax perspective, Belgium has an extensive network of double taxation treaties (DTTs) covering more than 95 countries, which helps to effectively avoid double taxation and facilitates cross-border structuring.

Attractive features include the expatriate tax regime for inbound taxpayers and researchers, tax incentives on innovation and intellectual property and the availability of advance tax rulings, which offer upfront legal certainty on the tax treatment of transactions.

On the other hand, the overall tax and labor cost burden in Belgium remains relatively high compared to several competing jurisdictions.