February 25, 2018
Ph.D. Elisabeth Hoffmann
The new Belgian corporate income tax reform was recently enacted by the law of 25 December 2017 (hereafter: “Law”), as published in the Belgian State Gazette of 27 December 2017. As from tax assessment year 2019 (i.e. income 2018 if the accounting year matches the calendar year), the Law decreases the standard corporate income tax rate from 33.99% to 29.58%.For small and medium-sized enterprises (hereafter: “SMEs”) a reduced corporate income tax rate of 20.40% will be applicable with respect to the first tranche of EUR 100,000. Any taxable income exceeding EUR 100,000 will be subject to the standard corporate income tax rate of 29.58%. This reduced tax rate of 20, 40% on the first tranche of EUR 100,000 is however subject to the condition that a minimum annual remuneration is paid to at least one of the company’s directors. The annual remuneration should at least be EUR 45,000 (if the company’s taxable base exceeds EUR 45,000) or an amount equal to the company’s taxable base (if the company’s taxable base is below EUR 45,000). The minimum remuneration is not required during the first four years for SMEs in order to benefit from the reduced corporate income tax rate. As from tax assessment year 2021 (i.e. income 2020 if the accounting year matches the calendar year), the standard corporate income tax rate will be further reduced to 25%. For SMEs, the reduced tax rate will be further reduced to 20% on the first tranche of EUR 100,000, provided the above- mentioned minimum annual remuneration is paid to at least one of the company’s directors.
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