Belgium has developed particularly advantageous tax regimes for specific business entities and foreign executives. These measures are detailed in the ‘Major tax incentives’ section.

The main taxes applicable in Belgium are:

• direct taxes (personal income tax and corporate tax)
• indirect taxes (VAT and registration duties)
• other taxes (inheritance tax, environmental tax, community taxes)

1. Direct taxes

An investor considering starting activities in Belgium can either create a company, open a branch office or set up as a self-employed person. The choice between these different forms can have significant legal consequences. The optimal choice depends on a number of economic and other factors. In principle the final decision will also be influenced by tax considerations.

The tax rates for companies and individuals are different. The highest tax rate for individuals is 50%. In case of significant profits, the tax rates for companies will be lower.

Personal income tax 
Resident individuals are subject to individual income tax on their worldwide income which, in principle, is computed by aggregating all items of income such as business and employment income, real property income, income from movable property and miscellaneous income. Click here for the progressive tax rates for income year 2004 (assessment year 2005).

Corporate income tax 
Companies and profit-making organizations with legal personality which have their registered office, their main business center or their seat of management in Belgium are subject to Belgian corporate income tax. These companies are subject to Belgian corporate income tax on their worldwide profits. If however the Belgian company derives income from a foreign branch, this income will be exempt from tax if the branch is located in a country which has a double taxation treaty with Belgium.

Foreign companies can be subject to corporate income tax if they are carrying out business activities in Belgium through a branch.

The standard Belgian corporate income tax rate amounts to 33,99%. A reduced progressive tax rate applies for companies which have a taxable profit not exceeding 322.500 EUR. Click here for more information.

The tax return as well as other forms can be downloaded on the following site www.minfin.fgov.be. This electronic service is known as FINFORM.

2. Indirect taxes

VAT (Value Added Tax) 
VAT is a tax on goods and services which is borne by the final consumer and which is levied in successive stages, namely at each transaction in the process of production and distribution. In view of the fact that at each stage of this process the tax paid on the inputs can be deducted, only the added value is taxed at that stage.

The standard rate is 21%. Nevertheless, the VAT code defines a number of goods and services which are subject to rates of 6% and 12%. Click here for a list of the VAT rates.

Persons liable with VAT must file a monthly VAT return. Small enterprises may opt for a quarterly return. VAT returns can be filed by internet on the following site www.minfin.fgov.be (INTERVAT).

Registration duties
Registration duties are levied, as a rule, when a deed or written document is registered. There are three types of registration duties: proportional duties, specific fixed duties and the general fixed duty.

The proportional registration duties amount in each case to a percentage of the tax base:

• sale of real estate: 12,5%
• capital increase of Belgian companies: 0,5%
• mortgage on real estate: 1%
• lease of real estate: 0.2%