Commercial Law in Belgium

The Belgian legal system

Belgium offers good conveniences for businesses, not only due to its central location in Europe, but also by being the headquarter of trading and European decision - making. With neighbours like The Netherlands, Germany, France and the United Kingdom, a stable economy and one of the highest living standards in Europe, Belgium is one attractive country for foreign investors.

A major partner with an important role for the international business, Belgium has excelent connections with the countries from the Far Est and with USA. The country’s economy is getting stronger and the commercial laws in Belgium are constantly updated in order to make this country attractive for foreign investors.   

Commercial Law in Belgium - the new corporate legislation

In order to reduce the administrative load related to reporting and documentation obligations of public limited liability companies in cases of mergers and demergers, the European Comission elaborated a new directive in September 2009.

As a result, starting from January 2012, there are new specifications in the commercial Belgian laws about documentation and reporting requirements regarding the mergers and demergers of the companies. According to the new legal specifications, in the case of a merger or demerger, the company can communicate the proposal by publishing the notice containing a hyperlink to the company’s website.

The new law stipulates that, by simply postings on the firm’s website, the merger or demerger documents are, from that moment on, available to shareholders. This new measures helps reducing bureaucracy and paperwork and also simplifies  the merger and demerger process.

Corporate taxes in Belgium

Another new law applied from January 2006 has improved the legal specifications concerning the capital contribution tax, by abolishing the 0,5% registration duty on capital contributions.

According to the Commentcial law in Belgium, corporate income tax rates are:

• 24,25% for taxable income less than 25.000 euro;
• 31% for taxable income from 25.000 to 90.000 euro;
• 34,5% for taxable income from 90.000 to 322.500 euro;
• 33% for a taxable income of 322.500 and up.

As a temporary measure, there is a 3% supplementary tax in addition to the corporate income tax. But capital losses are deductible, with one exception - capital losses on shares. The capital gains are subject to taxation with one exception - capital gains on shares.

Withholding taxes  in Belgium

Generally, in Belgium, dividends on a company are subject to a withholding tax of 25%. According to the European Community Parent-Subsidiary Directive, no withholding tax is available for dividends paid to a company established in Belgium (or in another EU member state) which owns 10% of the shares for at least one year period.

Regarding branch profits no tax is withheld, but interest payments and royalties (incomes, renting or concession of movable goods) are in general subject to a withholding tax of 15%.

You can obtain detailed information about  Commercial Law in Belgium, Company Law in Belgium or Double Taxation Treaties in Belgium  by contacting our law firm in Belgium.