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The standard withholding tax rate for dividends, interest and royalties has increased from 25% to 27% for income paid or attributed as of 1 January 2016.
The standard rate now is more generalised as certain beneficial regimes, such as the reduced rate for real estate companies and citizen loans, have been abolished.
Certain special rates, however, have been maintained:
The withholding tax rate upon the distribution of the so-called “liquidation reserve” within the five year term has also been increased from 15% to 17%. The same rate is now in place for capital decreases taking place in the blocking period originating from the 2013-2014 “click” system.
Another important withholding tax change has been implemented as part of the 2015 budget control.
Following the 2012 Court of Justice decision in the Tate & Lyle case, the Belgian Government has now finally introduced a definite measure to eliminate the discrimination that was in place between Belgian and foreign companies.
A new withholding tax rate of 1.69% was put in place at end of last year for dividends paid by Belgian companies to companies established in the European Economic Area or a country with which Belgium has signed a double tax treaty containing an exchange of information clause, that hold a participation of less than 10% but with an acquisition value of at least EUR 2,500,000.
The new rate applies to income paid or attributed as of 28 December 2015.
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It is recommended that clients with Belgian subsidiaries bear in mind the aforementioned changes – especially the new rate of 1.69% – when investigating the reorganization or cash distribution opportunities within their group.