Article 215 of the Belgian Income Tax Code (WIB 92) establishes the corporate income tax rate structure applicable to Belgian resident companies and foreign companies with a Belgian permanent establishment. The standard corporate income tax rate is 25%, reduced from 33.99% in 2018 through a multi-year reform aimed at improving Belgium’s competitiveness and attracting foreign investment.
Small and medium-sized enterprises (SMEs) that meet specific criteria can benefit from a reduced rate on the first tranche of taxable income. Companies with taxable profits not exceeding €100,000 pay 20% on the first €100,000 of taxable income, provided they meet conditions related to minimum remuneration for company directors. This reduced rate encourages entrepreneurship and supports the growth of smaller businesses.
Article 215 also references special tax regimes that modify the effective rate for certain activities or structures. The innovation income deduction, patent income deduction, and investment deduction schemes can substantially reduce the effective tax rate for qualifying companies. Participation exemption provisions eliminate taxation on dividends received from qualifying subsidiaries, preventing economic double taxation.
Recent reforms have focused on anti-abuse measures aligned with the OECD’s BEPS recommendations. The minimum substance requirements, anti-hybrid rules, and controlled foreign company (CFC) provisions ensure that rate benefits are available only to entities with genuine economic activity in Belgium. Transfer pricing documentation and country-by-country reporting requirements add compliance burden but increase transparency.
Understanding Article 215 is fundamental for corporate tax planning in Belgium. The interaction between the standard rate, reduced SME rate, and various deductions creates opportunities for tax optimization while requiring careful compliance with qualification criteria and substance requirements.
For comprehensive guidance on Belgian corporate tax, including planning strategies and compliance requirements, see our Belgian Corporate Tax Guide.
This content is for informational purposes only and does not constitute legal or tax advice. Always consult a qualified tax advisor for matters specific to your situation.