If your company makes a profit, its general meeting may decide to pay a dividend to its shareholders. The normal tax rate for dividends in Belgium is 30% (with the exception of a small exempt amount, see below), one of the highest rates in the European Union, but it is possible to reduce this tax to 20% and even to 15% if you respect certain Criteria.
First of all, it is worth recalling that since 2018, there is no longer the limit of 13% of the equity to be respected in order to benefit from the reduced rates on corporate tax. This limit was repealed at the last tax shift. Your company is therefore free to distribute the whole of its profit after tax without any tax consequences other than the rate of the withholding taxes payable.
- Exempt dividends
For the 2018 year of income, it is permissible to distribute up to €640 of tax-exempt dividends. It is necessary to make a Declaration and pay 30% of tax withholding, but this can be recovered via the Declaration of natural persons. For the 2019 income year, this exempt maximum amount is increased to €800.
2. Dividends taxed at 15% or 20%
If you have created your company since 01.07.2013 by a cash contribution, you can distribute a dividend at a rate of 20% after a waiting period of 2 years or at a rate of 15% after 3 years. If you have created your company before 01.07.2013, but you have made a capital increase in cash after that date, the reduced rate will be prorated on the portion of the newly brought capital. Attention: the capital must be fully paid at the time of distribution of the dividend.
You can also create a liquidation reserve. In this case, you will pay a prepayment of 10% together with the corporate tax of the year concerned, and after a period of 5 years, you will be able to distribute a dividend by paying the remaining 5%. Here, the date of incorporation of your company does not matter. If you decide to leave this money in reserve until the liquidation of your company, you will no longer pay any additional tax. Please note: If your company is at a loss, it will not be able to claim the reimbursement of the initial fee of 10%.
April 5, 2021
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December 2, 2019