Belgium: Tax measures

Alessandro Pasut

The federal government agreed on several tax measures it is now turning into draft legislation, among others regarding withholding tax. A reduced withholding tax will be introduced on dividends on new nominative shares in SME’s representing contributions in cash. Only dividends on new shares in SME’s can benefit. The distributing company must only be an SME at the time of the contribution of cash. Companies with no minimum capital may not benefit from the measure unless the capital after the contribution is at least equal to the minimum capital of a limited liability company. The withholding tax rate is 25% on dividends distributed out of profits realized in the first accounting year following the contribution; 20% on dividends distributed out of profits realized in the second accounting year following the contribution; 15% on dividends distributed out of profits realized in the third and any subsequent accounting year following the contribution. The shares must be held uninterruptedly in full ownership since their creation until the distribution of the dividend in order to benefit from the reduced withholding tax. In the framework of these measures several other anti-abuse measures will also be introduced such as: capital increases following capital decreases do not benefit from the reduced withholding tax rate except in case and to the extent the capital increase exceeds the capital decrease. Sums resulting from a capital decrease made by a company which is affiliated or associated with persons (including spouses, parents and dependent children) reinvesting those sums into the capital of another company cannot benefit from the reduced withholding tax rate either; the capital increase must be fully paid-up; no preference shares can be created.

 

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