Investing in Wallonia | Setting up a business| Taxes

corporation tax

The tax rate offered by the Wallonia Region is among the lowest in Europe.

Taxable base = Gross profits – Deductible expenses

• Specific examples of deductible expenses include various goods and services (subsistence expenses, air travel, rental charges etc.), salaries, social security and pension contributions (excluding meal vouchers and hospitalisation insurance premiums) and depreciation (linear and declining balance depreciation),
• Tax losses incurred in previous financial years can be deducted and deferred to subsequent financial years with no limitation as to the time period or amount,
• The reduced tax rate only applies if profits do not exceed €322,261,
• There is no local business tax (unlike in France),

• Wallonia has numerous taxation treaties with a multitude of countries aimed at avoiding double taxation.

Lower rates

Provided their taxable base does not exceed 322,261 euros, SMEs now enjoy a nominal tax rate of 24.98%.

Advance tax rulings  

• Advance tax rulings by the Tax administration allow businesses to invest in Belgium in complete CONFIDENCE,
• The investor provides the facts, and the Tax administration then issues an advance decision as to the applicable tax laws ON A CASE BY CASE BASIS,
• This transparent and negotiated procedure ensures that there is PRIOR LEGAL CERTAINTY when it comes to the tax implications of your investment project,
• The advance decision applies to ALL forms of taxation:
• Corporation tax,
• Personal income tax,
• VAT,
• Customs duty,
• Capital duty ,
• …

Restructuring of the Tax administration

• Tailored, streamlined service:
• One centralised file,
• Quick and professional,
• Confidential,
• Customer-focused and easily accessible:
• Clear and simple communication,
• Proactive and open culture,
• ‘One-stop shop ’,
•  ...

E-tax solutions

Status of expatriated foreign executives  

For EMPLOYERS:

• Attractive conditions for employers:
• Reduced salary costs in the case of foreign executives,
• Streamlined approach.

For EMPLOYEES:

• Attractive conditions for expatriated executives:
• Employer's own expenses are reimbursed (additional costs arising from position created in Belgium),
• Days worked abroad are not included.

personal income tax

• Resident tax payers are taxed on their global income,
• Rates vary between  25% and  50%,
• Special tax regime for foreign executives: Exemption of €11,155 in addition to remuneration for work completed outside Belgium,
• No taxes on large fortunes

fiscal incentives

These incentives relate to the following areas:

• The option to apply accelerated depreciation,
• The exemption of capital investments from registration tax.

There are also other direct benefits:

Tax deductions for investments: Belgian tax legislation permits certain deductions for investments. This is fixed at 14.5% for R&D investments for all companies:

• Tax exemptions for employing qualified staff assigned to research, quality assurance or export activities,
• Advance agreement with the Tax administration on inter-company prices.

notional interest

In a bid to make Belgium more attractive to foreign investors, the Parliament adopted an interest deduction scheme for venture capital known as a "notional interest" regime.

Objective :

• To alleviate the differences in tax treatment that exist between finance raised through venture capital and finance raised through borrowed capital,
• To allow companies to deduct a fictive charge (not stated in the accounts) from their taxable base that corresponds to a specific percentage of their "adjusted" equity capital.

The base used for calculating the deduction is the equity capital as shown in the accounts at the end of the taxable period prior to the period for which the deduction is requested. This base is then reduced by deducting various elements, such as the following:

• Net tax value of shares and company's own shares,
• Net tax value of financial fixed assets consisting of equity stakes, other shares and company's own shares,
• Net assets of permanent foreign establishments and property located abroad are exempted by agreement,
• Account value of elements held by way of investment which, by their nature, are not generally intended to generate periodic taxable income,
• Gains expressed in the accounts but not actually achieved,
• Capital subsidies.

For information on this measure, please download the following document:
KPMG - Note on the deduction of risk capital interest