Belgium: Liquidation bonuses

Alessandro PasutThe Program Law of 28 June 2013 introduced an increase of the dividend withholding tax for liquidation bonuses, i.e. the amount reimbursed to shareholders in excess of the paid-in capital upon liquidation, from 10% to 25%.
However, companies are given the opportunity until 30 September 2014 to distribute their reserves included in the last annual accounts approved by the General Shareholders’ Meeting prior to 1 April 2013 as a dividend at a tax of 10% instead of the regular dividend withholding tax of 25%, provided these reserves are immediately contributed into the statutory capital of the company.

This part of the capital will be treated as fiscally paid-up capital when it is retained within the company for at least 8 years, or 4 years for small companies, after its contribution. Thus no withholding tax will be due upon any later distribution to the shareholders.
In case of a capital reduction before the end of the applicable period, an additional tax will have to be paid on those reserves, the rate of which depends on the time between the contribution into capital and the capital reduction.

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