Increase in withholding tax rate
The Belgian general withholding tax rate applicable to dividends and interest attributed as of 1 January 2016 increases from 25 per cent to 27 per cent. Interest on ordinary saving accounts and on certain government bonds (so-called ‘Leterme bonds’) as well as royalties continue to benefit from reduced withholding tax rates.
Belgium has a large network of double tax treaties that reduce withholding tax rates to, among others, 20 per cent, 10 per cent, 5 per cent for residents of the treaty countries, depending on conditions that, among others, relate to the size of the shareholding and certain identification formalities.
Also, for Belgian companies, as this withholding tax constitutes an advance to corporate income tax, which is fully creditable against the corporate income tax due and refundable, this increase should have a limited impact on companies subject to Belgian corporate income tax.
