Belgium’s tax system combines moderate corporate tax rates with progressive personal income taxation. Corporations face a 25% tax on worldwide income, while individuals are taxed at rates up to 50%, along with a solidarity tax on large securities accounts. Belgium also imposes regional gift and inheritance taxes, but no wealth tax. With robust anti-avoidance rules, including Transfer Pricing and CFC regulations, and international cooperation through treaties and data exchange agreements, Belgium ensures compliance and transparency in its tax framework.
Belgium’s Tax System overview
| Corporate Income Tax: | 25% |
| Personal Income Tax: | 50%, progr. |
| Inheritance Tax (direct line): | 27%/30% |
| Gift Tax (direct line): | 3%/3,3% |
| Wealth Tax: | None |
Corporate Income Tax
Corporations with their principal place of management in Belgium are subject to tax on world-wide income at 25%. Non-resident corporations are subject to tax only on source income.
Personal Income Taxation
Resident individuals are subject to tax on their worldwide income at progressive rates up to a maximum of 50%. There is also a Solidarity Tax of 0.15% on securities accounts of more than EUR 1MM. Capital gains on shares are normally exempted and dividends and interests are taxed at 30%. Belgium has gift and inheritance tax at the regional level at varying rates.
Anti-Avoidance Rules
Belgium has Transfer Pricing rules, Thin Capitalization rules, and Controlled Foreign Corporation (CFC) rules. Belgium also has General Anti Avoidance Rules (GAAR).
Controlled Foreign Corporations (CFCs)
CFC rules apply to Belgian resident corporations that hold more than 50% capital, voting rights, or profits of the CFC, and where the CFC is not subject to tax or is taxed a less than 50% of the Belgian corporate income tax rate.
In addition, any entity resident in a jurisdiction determined to be non-cooperative by the EU is considered to be a CFC. Belgian resident corporations are taxable on their pro rata share of the undistributed profits of the CFC.
Foreign Trusts
Belgium has not ratified the Hague Convention on the recognition of trusts. However, foreign trusts are recognized under principals of private international law, except where they contravene public policy, for example in forced heirship matters.
Under the Cayman Tax Law (CTL), introduced in 2015, foreign trusts and entities without legal personality are treated as “legal constructs”, as well as entities with legal personality that pay tax at less than 15%, or are resident in the EEA and pay tax at less than 1% based on Belgian accounting rules. There is a list of entities established outside the EEA that are presumed to be subject to a tax of less than 15% in accordance with Belgian law.
The “founder” of a legal construct (including his heirs after he passes away) who is a Belgian resident is taxed transparently on the income of the entity as if he had received it directly. If a Belgian resident is a beneficiary of a legal construct, the distribution received from the entity qualifies as a dividend and is taxed at 30%. Some exceptions apply. Where the settlor is non-resident in Belgium, and the beneficiaries are resident in Belgium, they will only be taxed in case of a distribution. On the death of the settlor, the trust becomes transparent to the Belgian resident beneficiaries, heirs of the settlor.
Double Tax Treaties (DTTs)
OECD Multilateral Convention
Common Reporting Standard (CRS)
FATCA
Belgium offers a balanced tax system with clear rules for corporations and individuals. Its progressive approach to personal income taxation and regional gift and inheritance taxes are offset by the absence of a wealth tax. Strong anti-avoidance measures and participation in global data exchange initiatives demonstrate Belgium’s commitment to fair and transparent taxation, making it a structured and internationally aligned regime for residents and businesses alike.
