BELGIUM

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ABOUT BELGIUM

Belgium at a Glance

Belgium is located in the heart of the European Union, bordering France, Germany, the Netherlands and Luxembourg and within touching distance of Great Britain, Belgium is located at an intersection of some of the biggest economies in the world. Belgium is one of the most important centers of economic activity in Europe. Several investment incentives granted by the federal and regional governments such as financial assistance, investment subsidies and tax breaks have resulted in a business friendly environment. Belgian (regional) authorities are favorable towards foreign investment: various attractive tax regimes and investment incentives exist to facilitate and draw foreign investment to Belgium.

 

Population: 11 348 159
Form of government: Federal parliamentary constitutional
Official & spoken languages: Flemish, French, German
Currency: Euro
Time zone: CET (UTC+1) summer CEST (UTC+2)
GDP (PPP): $508 598 billion
GDP (PPP)/per capita: $44 881
Average salary: 1920 euro
Unemployment: 6,6 %
Major trading partners: Germany, France, Netherlands, United Kingdom, United States

 

 

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Doing Business in Belgium

Advantages of doing business in Belgium

Incorporating a Belgian LLC can be fast it only requires:

  • One shareholder of any nationality and residency who can be an individual or a body corporate
  • One individual director of any nationality and residency
  • A paid-up share capital of EUR 18 550

Belgium an attractive jurisdiction for doing business because:

  • The country offers an open economy among the world’s top exporters and excellent transportation infrastructure.
  • Belgium shares borders with main European markets including Germany, Netherlands, The United Kingdom, France.

Holding companies benefits in Belgium:

  • Belgium holding companies benefit from a reduced corporate tax rate of 4% on dividends received by both global and local subsidiaries, provided that the holding company has owned at least 10% of their shares during the preceding year.
  • Belgium has signed double taxation avoidance agreements with over 85 countries.

 Disadvantages of doing business in Belgium

  • The standard corporate tax rate of 33% is one of Europe’s highest.  The employees and employers social security contiributions add up to 38% of the employees gross salaries. 
  • All companies are required to register for value added tax, which standard rate is 21%.
  • According to the location of the company, the official language will either be French, Flemish or German. All corporate documents will have to be translated in at least one of these languages, as well as contracts signed with local employees or customers.
  • Labor costs in Belgium are recorded by Eurostat at 40€ per hour, the third highest level in Europe. Belgium has also the second highest minimum salary in Europe, fixed at 1500€ per month, just after Luxembourg.

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The World Bank “Ease of doing Business -ranking”

Overall rank 2016: rank 52
– Starting a business: rank 16
– Dealing with construction permits: rank 39
– Getting electricity: rank 103
– Registering property: rank 138
– Getting credit: rank 105
– Protecting minority investors: rank 57
– Paying taxes: rank 59
– Trading across borders rank 1
– Enforcing contract: rank 52
– Resolving Insolvency: rank 11

READ MORE: BELGIUM COMPANY FORMATION SERVICES & FEES

Residency and Moving to Belgium

Tax Resident in Belgium

TAX RESIDENCY – INDIVIDUALS:

  • Tax Resident of Belgium is individual that has Belgium residency or Belgium is center of his business and personal interest.
  • Tax Resident of Belgium is individual that spends in Belgium above 183 days during calendar year
  • Both income gained in Belgium and worldwide tax will be subject to taxation.
  • Income tax is progressive – the more you earn, the higher your rate will be.

TAX RESIDENCY – BUSINESS:

  • Tax Residents of Belgium is business that is registered in Belgium OR  has actual management and control unit in Belgium.
  • Tax Resident of Belgium is nonresident business that has actual management and control unit outside of Belgium but has branch in the country.
  • Subject of taxation for residents is gained income in Belgium as well as Worldwide.

Income that is gained in Belgium by nonresident business is taxed in Belgium. Taxable source of income are:

  • Income from selling of goods and services
  • Interest gained in Belgium
  • Dividends paid by resident companies
  • Income related to real estate

 

Taxation in Belgium

Taxes in Belgium

Residence: A company that is registered in Belgium or that has its management and control there is deemed to be resident for tax purposes

Basis: Resident companies are taxed on worldwide income, nonresidents are taxed only on Belgian-source income

Taxable income: Taxable income is based on accounting profit, adjusted for tax purposes by nondeductible expenses, nontaxable income, tax depreciation, etc.

Taxation of dividends: The standard withholding tax rate on dividends in Belgium is 27%. This applies when no double tax treaty or the Parent-Subsidiary Directive are applicable. A reduced rate of 25% is also applicable and so is a 15% rate for shares issued in exchange for cash distributions made to small and medium-sized companies.

The withholding tax rate on dividends is 0% if a tax treaty or directive is in force and if the company that receives the dividend payment holds at least 10% of the company making the payment and has held participation in that company for at least one uninterrupted year.

Capital gains: Capital gains are included in taxable income and are subject to the normal corporate tax rate of 33%. Capital gains are calculated in accordance with the tax rules and may be offset only against capital losses.

LossesTax losses(including capital losses) may be carried forward indefinitely for tax purposes by the entity that incurred the losses.

Foreign tax creditAn ordinary tax credit is available for foreign income tax paid . 

Participation exemptionSee Taxation of dividends

Taxable income: 33%
Taxation of dividends: 27%
VAT registration: All companies are required to register for VAT
– VAT Rates: The standard rate of VAT is 21%. 
Surtax: 0,746% for multinationals and 1,246% for SMEs.
Alternative minimum tax: No
Withholding tax (general): 30%
– From Dividends  0%/15%/30%
– From Royalties 15%/30%
– From Interests 0%/15%/30%
Transfer tax: A transfer tax of 3% is levied on the transfer of immovable property.
Capital gains tax: Capital gains are taxable at a rate of 9%
Real property tax: Property tax is levied on the ownership/use of property at rates ranging from 0,25% to 1%. Limited tax exemptions exist for construction companies.
Social security: The employer is required to make social security contributions at a rate of 10,3% of an employee’s salary. The contribution comprises pensions (5,5%), health (4,3%) and unemployment (0,5%). The maximum base for contributions in the calendar year is EUR 5 000€
Payroll tax: The municipal authorities levy a surtax of up to 15% on an employee’s salary. In addition, labor fund contributions are levied on the gross salary, at a rate of 0,2%.
Stamp duty: No
Capital duty: No
Tax treaties: More than 90 tax treaties are in force. Belgium signed the OECD multilateral instrument on 7 June 2017.
Anti-avoidance rules:
– Transfer pricing Transactions between related parties (as defined) must be at arm’s length. The comparable uncontrolled price method may be used, but in the absence of any direct comparables, the taxpayer may use the cost-plus or the resale price method.
– Thin capitalization rule There are no specific thin capitalization rules, but interest paid to a nonresident (whether or not related) must be on arm’s length terms.
– Disclosure requirements No

Compliance for corporation:

Tax year: Calendar year.

Consolidated returns: Consolidated returns are not permitted; each company must file separate return.

Filling requirements: The tax return must be filed within three months after the year-end.

Penalties: A penalty of 0,03% per day is imposed for late payment-

Rulings: No.

Tax authorities: The tax authorities are organized within the Ministry of Finance and the municipal level.

Personal Taxation in Belgium 2018

Personal taxation basis:

Residents individuals are taxed on their worldwide income: nonresidents are taxed only on Belgian-source income.

Tax Residence:

An individual is resident if he/she is in Belgium for 183 days or more in a calendar year or if his/her principle place of residence or the center of economic interests is in Belgium. 

Filling status:

Joint returns are not permitted.

Income tax rates in Belgium:

Taxable income comprises income from employment, business and professional income, investment income ( dividends, interest and royalties ) and income from immovable property.

Social security payments in Belgium:

Social security contributions due by an employee are levied at a rate of 24%. These include contributions for pensions (15%), health (8,5%) and unemployment (0,5%). The employer also must make a contribution. The maximum base for contributions in the calendar year is EUR 50 000. Benefits provided to employees in addition to the basic salary are exempt from social security contributions.

Inheritance/estate tax in Belgium:

A 3% tax is levied on the inheritance of real estate. An exemption is available for the transfer of property as a gift or inheritance to children, parents or a spouse.

Net wealth/net worth tax in Belgium:

No

Tax year:

Calendar year

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OUR OFFERS IN BELGIUM

  • BELGIUM - COMPANY FORMATION FROM 1.950€
  • business planning, tax consulting by Novasigma
    BUSINESS CONSULTING FROM 125€/h
  • TAX PLANNING FOR PRIVATE PERSONS FROM 850€
  • TAX CONSULTING FOR CORPORATIONS FROM 2.490€

 

NOVASIGMA IN BELGIUM

Consulting & Advisory services

Consulting & Advisory services

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Incorporation, Administration & Business services in Belgium

Incorporation services in Belgium

  • New company formations in Belgium | from 1.950€
  • Company Closures and liquidations in Belgium | Ask for quotation

Company administration in Belgium

  • Legal registration address service for a Belgian company | from 1950€/year
  • Company secretarial service | 60€/h
  • Nominee director services | from 100€/year
  • Nominee shareholder/ techical UBO services | from 250€/month

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Additional business services in Belgium (by Novasigma Certified Partners)

Accounting and Bookkeeping services in Belgium


Some of the common domestic Accounting and Bookkeeping services we provide in Belgium include

  • Bookkeeping and Accounting Package | from 600€/ year + 59€/h
    • Invoicing and payments
    • Annual accounts
    • Monthly Reconciliation
    • Monthly financial statements (including balance sheet and income statement)
    • Payroll services
    • Income and tax return
  • Management accounts | Ask for quotation

Value Added Tax (VAT)

  • VAT registration | +250€
  • EORI registration | +250€
  • Advice on VAT scheme options | Ask for quotation
  • VAT returns and declarations | 59€/h

Audit

  • Annual accounts in view of an annual audit and attend accounting audits | Ask for quotation

Legal services for Belgian companies and business owners

Legal services in Belgium for all Novasigma Clients including companies and their owners and directors

Novasigma has built in Belgium team of lawyers, associates and legal advisers to assist our clients with a business and tax planning, overseas business operations, risk management and other legal matters. Primarily focused on business transactions, Novasigma Accounting & Law corporate attorneys are a great asset to a small and large businesses. With a background on corporate law, our corporate lawyers and legal advisers have an in depth knowledge on the transactions that may put your business at risk of litigation. These include contracts and negotiations, taxation laws, business structuring, buy/sell agreements, and intellectual property, among others.

Send us a Brief for Quotation

Banking, Financial and Insurance services in Belgium

Banking services in Belgium

Financial services in Belgium


 

NEWS AND BUSINESS OPPORTUNITIES IN BELGIUM

  • best countries to do business in Europe 2017
  • Offshore bank account opening with Euro Pacific Bank
    Euro Pacific Bank- New USD Route available
  • TOP 50 Countries to Move for Young Up-Coming Self-Made Millionaires

 


Interested in Belgium? Please leave us a message and we will come back to you shortly.

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