Registered office doctrine and Belgian taxation

The real seat doctrine is now a thing of the past for Belgian companies. With the introduction of the new Companies and Associations Code (CAC), the Belgian legislator has decided to follow what is common practice in many other European countries, by opting for application of the registered office doctrine.

The radical reform of corporate law necessitated amendment of tax regulations as well, as the legislator deemed it unfair that these would change dramatically as a result.

Situation prior to the CAC: real seat doctrine

According to the old Companies Code, companies were governed by the corporate laws of the country where they carry out their main activities or conduct their administration – the ‘real seat’ of their operation.

This means that in the past, a company’s place of incorporation did not matter under Belgian law. The determining factor was whether or not the company exercises its main activities or administration in Belgium. If that was the case, the company would be governed by Belgian corporate law.

This made Belgium a less than obvious choice for foreign companies.

Situation according to the CAC: registered office doctrine

Belgium could no longer stay behind and eagerly looked across its borders for inspiration. It found that the Netherlands, for instance, managed to turn their corporate law into a significant export product – many foreign corporations found their way to our northern neighbour.

It so happens that the Netherlands applies the registered office doctrine. According to this doctrine, the corporate law applicable in the country where the company has its registered office is the law governing the affairs of the company.

With the introduction of the new CAC, Belgium has also made the resolute choice for the registered office doctrine. That is good news, as it provides freedom and flexibility for all.

However, there is no reason to become all enthusiastic yet, as the planned online company registration option has not yet materialised. As a result of this administrative flaw foreign corporations could still decide to skip the Belgian option.

Taxation and the real seat doctrine

A company is a Belgian resident for tax purposes and hence taxed in Belgium for its worldwide profits if its main operation or administrative seat is located in Belgium. This is in line with the real seat doctrine. And it does not change.

Ergo: the real seat doctrine is and remains the prevailing doctrine for tax purposes.

As a result of the introduction of the CAC, companies are now governed by the corporate law of the country where they have their registered office. Consequently, one may no longer assume that a company that has its registered office in Belgium by definition is subject to Belgian corporate tax. After all: the law requires effective management of the company from Belgium.

In principle, a company must also have legal personality in order to fall under the corporate tax system. However, a special provision already taxes foreign bodies without legal personality that make a profit in Belgium, if their form is similar to a company with legal personality under Belgian law (section 227(2) of the Belgian Income Tax Act of 1992).

New legal presumption with double evidence to the contrary

As stated earlier, one may no longer assume that a company that has its registered office in Belgium by definition is subject to Belgian corporate tax. This implies that the tax authorities would have to assess each case separately. That is simply undoable.

To solve this issue, the legislator introduced the legal presumption with double evidence to the contrary. This works as follows: save for evidence to the contrary, any company that has its registered office in Belgium is deemed to have its effective management in Belgium and therefore is deemed to be a resident for tax purposes.

This presumption can be rebutted by demonstrating that the company 1) has its real seat in another state and 2) is a resident of this other state for tax purposes.

The accounts must follow suit

The legislator had to take measures to ensure that companies that have their registered office abroad and therefore are governed by foreign laws, can be taxed in Belgium (new section 320/1 of the 1992 Income Tax Act). Consequently, every permanent office of such companies is now required to keep accounts and draw up financial statements according to Belgian law, unless they are exempt. The financial statements must be attached to the corporate tax return, unless they already have been published.


As a result of this reform Belgium no longer lags behind.  Our corporate law is now ready to welcome more foreign companies to Belgium. However, whether we have enough of a competitive edge in terms of taxes remains to be seen.

Need more information? Contact us without any obligation.

New interest deduction limitation: are interests still fully deductible?

The new Belgian interest deduction limitation was created in the framework of the transposition of the European Anti-Tax Avoidance Directive (ATAD). The purpose of the ATAD is to prevent the further erosion of the taxable base as a result of interest deduction.

Before the new interest deduction limitation, Belgium had quite a favourable interest deduction regime. What is the impact of ATAD?

From when?

The new regulation on the interest deduction limitation has been included in the new article 198/1 of the 1992 Income Tax Code (ITC92). This will be applicable to financial years starting from 1 January 2020.

This means Belgium is one year late, because the transposition of the Directive should be effective as of 1 January 2019. Member States can ask for a postponement of this deadline if they already have a regulation that is just as effective as the new measure. Belgium has made use of this possibility. It alleges that the postponement is justified based on the thin cap rule, deduction depending on market interest, and the general anti-abuse regulation. The question is whether these arguments are sufficient for the European Commission.

Scope of the interest deduction limitation

Both Belgian legal persons that are subject to corporation tax and Belgian entities that are subject to tax for non-residents fall within the scope of the new interest deduction limitation.

Article 198/1, §6 ITC92 does provide for a few exceptions. For instance, financial institutions and companies whose only activity is the performance of public-private partnership (PPP) projects are outside the scope. In this context, financial institutions include credit institutions, investment companies, insurance companies and pension institutions. In a bill that has not yet been adopted, leasing companies are also considered credit institutions.

Furthermore, the new interest deduction limitation does not apply either to companies that are not part of a group, have no establishments abroad, hold no direct or indirect stake of at least 25% in another company and whose shareholder does not hold a direct or indirect stake of at least 25% in one or more companies.

Financing cost surplus

The new interest deduction limitation implies that the net interest costs are no longer deductible to the extent that they exceed either the minimum threshold of 3 million euros or 30% of taxable EBITDA. Net interest costs are also referred to as the financing cost surplus.

The financing cost surplus is obtained by subtracting financing costs from financial income. Financial income is the total of interest income and economically equivalent income that is included in the income of the tax period and is not exempt under a double taxation treaty. Financing costs are the total of interest costs and economically equivalent costs that constitute a deductible professional cost and are not connected to a permanent establishment whose profits are exempt under a double taxation treaty.

An exception is made for PPP projects and loan agreements entered into before 17 June 2016. The latter exception only applies on condition that no fundamental changes have been made to the loan agreement after this date. Examples of fundamental changes are a change in parties, interest rate, duration or refinancing.

Calculation of taxable EBITDA

Taking into account the above-mentioned threshold amounts, it is important to know how taxable EBITDA is calculated. The calculation is as follows:

Taxable income for the tax period after the first calculation

+ Tax-deductible amortisations and depreciations

+ Financing cost surplus, except non-deductible part

- Income to which the dividends received deduction applies

- Income to which the innovation deduction applies (85%)

- Income to which the patents deduction applies (80%)

- Profits exempt under a double taxation treaty

- Profits obtained from the performance of a qualifying public-private partnership project

- Group contributions that are deducted from the taxable base in the framework of tax consolidation

Transfer of financing cost surplus?

If due to an exceedance of the threshold amounts during a tax period the financing cost surplus cannot be deducted, transfer to a later a tax period is possible. The amount transferred is added to the financing cost surplus of this later tax period in order to calculate the limitation in accordance with the threshold amounts.

What happens with a group?

If a company belongs to a group, the financing cost surplus, taxable EBITDA and the minimum threshold are determined based on a consolidation that is only applied to calculate these concepts. In other words, this consolidation is not used for any other tax purposes. What must be understood by a group is what is defined as a group in the current thin cap rule (Art. 198, § 3 ITC92).

As the aim is to tackle international profit shifts, interests and economically equivalent costs or profits payable to or by another Belgian company or entity of the group are, in principle, excluded from the calculation of the financing cost surplus. Only those falling under the above-mentioned exceptions (e.g. financial institutions) can be included in the calculation.

In the calculation of taxable EBITDA, costs and profits payable to or by a Belgian company or entity of a group are also eliminated. Costs payable to another Belgian group entity must be added to the taxable EBITDA of the individual legal person liable for tax. On the other hand, profits obtained from another Belgian group entity must be subtracted.

In order to be able to put this into practice, all group transactions must be identified via the profit and loss account. Afterwards, the rules explained above can be applied in the calculation of the financing cost surplus and taxable EBITDA.

Where the 3 million minimum threshold in a group is concerned, this must be distributed across the group. A Royal Decree will need to determine the distribution key. Furthermore, there is a possibility for the transfer of unused deduction capacity, i.e. the positive difference between the threshold amount and the financing cost surplus, to other, non-excluded group members.


In any case, the new interest deduction limitation is more stringent than the current regulation. It is clear that the interest deduction limitation is a complication for group entities. As long as the minimum threshold remains at 3 million, this will mainly affect larger companies. Currently there are no signs that Belgium might lower its threshold, although the ATAD leaves this decision up to the Member States.


GDPR, the clock will still be ticking after 25 May 2018.

For many companies, GDPR is a word they don't know or prefer not to hear. However, every company will need to be GDPR compliant as of 25 May 2018. Therefore, it is important that you are aware of the obligations and the sanctions that the GDPR contains.

GDPR, what is it and why?

GDPR is the abbreviation for “General Data Protection Regulation”. It concerns a European regulation that aims to protect the personal data of natural persons. The GDPR was established because of the digitalisation of our world.  Protection of personal data is very important in this matter. Companies like Facebook and Google process a lot of personal data, but they are not alone. We can be quite sure that almost every company does this.

The second reason why the European regulation was established is for uniformity. Before the regulation there was already a European guideline. This was converted into national law in every member state, with too many differences between the member states. For this reason the European Union chose to issue a regulation. This regulation is applicable immediately in every member state.

Scope of the GDPR

The regulation is applicable as soon as the personal data of a natural person is electronically processed or is arranged in order (alphabetically, chronologically). Processing should be interpreted broadly. Examples are ordering, collecting, storing and processing.

The regulation also provides some exceptions to the scope of application. The processing of personal data in the context of activities which are outside the scope of Union Law, or activities carried out by a natural person in the course of purely personal or household activity, do not fall within the scope of application. Also, the processing by a member state in the context of the policy for border control, asylum and immigration is not targeted by the regulation.

Regarding the territorial authority, this extends beyond the EU. First of all, the controllers and processors who are in the EU must comply with the regulation. The regulation also has an impact on the controllers and processors outside the EU. They must always comply with the regulation to the extent that they process personal data of people who are in the Union.

 More rights for the data subjects

The big aim of the regulation is to provide more protection to the natural person regarding his personal data. This protection is associated with providing information, exercising control as well as granting rights.

The data subject, whose personal data is processed, must obtain transparency. This means that the data subject must be informed in good, clear and understandable language. The regulation itself provides explicitly what must be included in this information. (Art. 13 and 14 GDPR)

In addition, the regulation foresees that the data subject has more control over the processing of his personal data. This is achieved by the rights which are granted to the data subject. These rights are: transparency, rectification, inspection, deletion, limitation, objection, free transfer and automated decision-making. By means of being able to exercise these rights, the data subject has the possibility to control the processing of his personal data and possibly taking action.

If all this is not enough, the data subject can lodge a complaint with a supervisory authority or apply to the courts. For Belgium the supervisory authority is Privacy Commission.

Obligations arising from the GDPR

In addition to the protection of personal data of the data subject, there are more and more stringent obligations for the controller (and processor). First the controller must be able to show that they are GDPR compliant. This means that the burden of proof regarding the compliance of the obligations rests with the controller. In order to show this, the controller must establish an internal policy.

This internal policy ensures that the other obligations of the regulation are complied with. These other obligations are the guarantees of the rights, procedures regarding data leaks and the exercise of rights by the people concerned, establishing a register of processing activities, privacy declarations, making contracts conform (employees, customers, suppliers, ... ), improving the security of the IT systems, etc.

Is this not going too far?

Despite the best intentions of the regulation, this is all very far reaching. Everybody agrees that the protection of personal data is essential in a digital world. However, the regulation has also dragged small companies into its gigantic web of obligations. Think about the baker just around the corner, who processes your personal data with the objective of preparing your order or binging it to your home. He is also subject to the regulation.

The fact that the regulation provides for proportionality, is only a meagre consolation. The regulation certainly allows that the obligations only have to be complied with in proportion to the possibilities of the company. However, compliance remains a difficult feat for many companies.


The GDPR applies to almost everyone. You cannot afford to ignore the regulation as the sanctions are not small. The administrative fines can amount to EUR 20,000,000 or 4% of the global revenue of the previous fiscal period if this is higher. The Privacy Commission will perform the audits using investigation and prosecution powers. The risk of an audit increases indeed if a data subject files a complaint.

If you so wish, aternio can assist you in making your company GDPR compliant.

aternio café june

Get to know us better and taste our expertise and tasty mocktail for free at aternio café. Every second Monday of the month, except during the summer months, the lobby of Fosbury & Sons Antwerp is very briefly transformed into aternio café from 16.30 to 17.30. After two short presentations from our finance & legal experts we turn aternio café up to full speed to meet and catch up with each other and other professionals.

Our first edition will take place on Monday 9 April 2018. We hereby gladly introduce the following subjects to you:

  • Online shopping: tips & tricks
  • Pop-up, short term rent

See all about aternio café on our Facebook page. See you then!

Disclosure obligation of aggressive cross-border constructions for tax specialists

From 1 July 2020, tax specialists will have to disclose aggressive cross-border constructions to the tax authority. This is part of the new fight against international tax evasion. The proposal mainly reflects Action Point 12 of the 2013 international plan of the OECD on Base Erosion and Profit Shifting (BEPS).

Transparent fiscal constructions

Today, fiscal constructions are still being set up so taxable profits can be flushed through tax havens or total tax burden is significantly reduced in other artificial ways. The constructions themselves aren't always illegal, but since the Panama Papers aggressive fiscal planning is no longer justifiable to society.

Central database

On Tuesday 13 March 2018, the European Ministers of Economic and Financial Affairs (‘ECOFIN’) met to discuss the implementation of a disclosure obligation for ‘intermediaries’. This draft Directive is part of a series of measures that should help to avoid evasion of corporation tax.

Intermediaries – such as tax lawyers, tax advisers, accountants – will therefore have to disclose potentially harmful constructions to the national tax authority. European Union member states will be able to exchange this information via a central database. In addition, member states will be obliged to impose sanctions on intermediaries who do not comply with the transparency measures.

What does ‘aggressive’ mean?

Of course, the question is: what should be understood by ‘aggressive' cross-border planning’? A set of “essential characteristics” will help determine which types of constructions will have to be reported to the tax authority. This doesn't necessarily mean that a construction is harmful. It suggests it may have to be investigated by tax authorities. A lot of constructions are entirely legitimate so it is a matter of determining which ones aren't.


Member states have until 31 December 2019 to incorporate the Directive into their national legislation. The new disclosure obligations will apply from 1 July 2020. From that date, the disclosure obligation should also come into effect in Belgium.

Member states are obliged to exchange information every 3 months, more precisely within one month after the end of the quarter in which the information was presented. This means the first automatic information exchange has to take place on 31 October 2020 at the latest.

The final Directive will be adopted by the Council acting on unanimity after consulting the European Parliament.

The new innovation income deduction stimulates research and development in Belgium

As of July 1 2016, the net patent deduction has been replaced by an innovation income deduction.  It allows for a deduction of 85% for innovation related income. Various related measures were strengthened and expanded.  The implementation of this innovation income deduction has made Belgium the country of choice for businesses to conduct research and development.


The previous patent deduction did not meet the requirements of point 5 of the BEPS-action plan, according to the OECD (Organization for Economic Co-operationand Development).  The BEPS-action plan contains worldwide coordinated agreements to prevent tax evasion. Specifically, the action plan consists of 15 action points meant to prevent base erosion and profit shifting.

The patent deduction as it existed before July 1st 2016, left too much room for profit shifting. The goal of the new innovation income deduction is to only provide the tax advantages to the taxpayers who actually incur the research and development expenses.  The innovation income  deduction was implemented retroactively through the law of February 9th 2017.

The nexus fraction

The new innovation income deduction differs from the patent deduction in several ways.  Specifically, it sets forth two stricter measures. The first of these measures requires that the net-innovation-income is multiplied with the nexus fraction. The nexus fraction equals the qualifying expenses divided by the total (global) expenses.

Qualifying expenses are expenses incurred in the research and development which the business carried out itself, or which it outsourced to an unrelated business.  Qualifying expenses may be increased by 30% for purposes of applying the nexus fraction.

Global expenses are the expenses that the business has incurred or taken upon itself for the development of a patent. In other words:

  • expenses incurred for research and development of the intellectual property right that the business conducted itself;
  • expenses incurred for research and development of the intellectual property right that the business outsourced to an unrelated business;
  • expenses incurred in the request and acquisition of the intellectual property right; and
  • expenses incurred for research and development of the intellectual property right that were ‘outsourced’ by a related business.

Net income

The new innovation income deduction is calculated based on the taxpayer’s net income, unlike the patent deduction which was calculated on the gross income.  This is another way in which the regulation has become more stringent. The net innovation income is determined by deducting the global expenses from the gross income.

Ideally, the net-innovation-income is determined separately for each intellectual property right.  However, the law allows for a concession if this isn’t possible; in that case, the net-innovation-income may be determined per group of products.

The nexus fraction is applied differently depending on the way in which the net-innovation-income is determined. Normally, the nexus fraction is applied separately for each individual property right; but, it may exceptionally be applied per group of products.

Expanded scope of applicability

The scope of applicability  was expanded, in compensation for the stringent regulations outlined above. The most important is the expansion of the material scope of applicability. This is one of the reasons that this deduction is considered ‘new’ and is referred to as the “new innovation deduction”.

The expansion of the material scope of applicability means that the deduction is no longer limited to the income from patents and thereto belonging certificates. The new income innovation deduction also applies to income from breeders’ rights, orphan drugs, data-or market exclusivity and computer software with author protection rights.

The concept “patent income” was also expanded. Under the new regulations, reimbursement for damages due to the violation of an intellectual property right and amounts received due to the alienation of an intellectual property right, are also considered innovation income.

Temporary exemption

The new innovation income deduction allows one to take advantage of the exemption from the moment a request for an eligible intellectual property right has been submitted.  In other words, one is no longer required to already have the intellectual property right, prior to using the deduction. This is a significant change for businesses. This is considered to be a temporary exemption, due to the fact that the request is still awaiting review. As soon as the request is approved, the temporary exemption is converted into a permanent exemption.

Retention of the deduction

The new innovation income deduction provides two additional important changes. As of July 1, 2016, the deduction will no longer be lost as a result of a tax-free contribution, fusion, a company split, or similar transaction. Additionally, deduction surpluses may be carried over to the next taxable period.

Unused deductions no longer get lost.

Transitional provisions

The new innovation income deduction is applicable retroactively. The innovation income deduction is applicable to innovation income as of July 1, 2016, despite the fact that it did not become a law until February 9, 2017. Regardless, the legislator has also provided a transitional provision. As such, the patent deduction may still be applied to patent-income obtained until and including June 30, 2012. This patent deduction has to be obtained through self-developed patents that were requested before July 1, 2016, or through improved patents and licensing rights that were actually obtained before July 1, 2016.

In addition to these conditions, the legislator also implemented an anti-misuse provision. As a result, the transitional provision is not applicable to patents obtained directly or indirectly by a related company, when the company carrying over the income would not itself benefit from a patent- or similar deduction in its country. The legislator hereby attempts to prevent profit shifting through use of the transitional provision.


Upon comparing the stricter measures and expansions, we can conclude that the new innovation income deduction is a valuable change.

Especially the expansion of the applicable scope will result in new opportunities for many businesses. The new innovation income deduction stimulates research and development in Belgium.

Although Belgium is known for its high taxes, this very generous tax regime highlights its progressive approach in this area.

Horizontal supervision: a new approach to fiscal control in Belgium

A new approach to fiscal control is in the making in Belgium. In the Netherlands, horizontal supervision, where fiscal control is exercised based on an agreement between the tax authorities and the tax payers (or their accountant or tax advisors), has been an option for years.

As a result of this year’s Summer Agreement, horizontal supervision is also on the horizon for our country.  This marks a tremendous change from the current fiscal control approach, which is solely exercised by the tax authorities and which only takes place after a tax return has been submitted.

What is horizontal supervision?

Horizontal supervision means that the taxpayers (and more likely, their accountants or tax advisors) are responsible for conducting their own own tax audits. It is based on the notion of increasing cooperation between the taxpayer and the tax authorities.

This of course, requires clear agreements between all parties involved, with clear quality standards. These agreed-upon standards then have to be followed. As such, an accountant or tax advisor will have to refuse performing services requested by the taxpayer-client if these are in conflict with the quality requirements.

Associations and their members

In implementing horizontal supervision, agreements will be made on several different levels. First of all, all-encompassing agreements will be made with the professional associations (BIBF, IAB, 
).  These agreements will set forth strict quality requirements. The associations will also be called upon to ensure that members effectively agree to provide the required quality.

Additionally, accountants and tax advisors will be bound by a service provider’s agreement, by which they will specifically agree to meet the quality requirements.

To ensure a proactive approach, participating members will also be called upon to engage with the tax authorities.

Participating businesses

A business can participate in the horizontal supervision approach by working with an accountant or tax advisor who meets the requirements to do so.  To participate, the business will need to sign a participation form.

Of course, participating in this horizontal supervision system does not exclude a control by the tax authorities. Nothing prevents them from checking that the agreements are in fact being complied with.

Advantages of participation

There are clear advantages of participating in the horizontal control system. Participating businesses will get a clear overview of their tax situation more quickly. Also, any questions or concerns can be discussed with the tax authorities in advance. Business will have more certainty as a result.

Additionally, participating businesses should be less often subjected to fiscal control. They would only be controlled in the event they are part of the few selected.  Exactly how this selection will be determined (and exercised) is to be seen.

No participation requirement

There is no requirement to participate in the horizontal supervision approach. Accountants and tax advisors can choose whether or not they want to opt in.

Businesses will also have the choice. If they would prefer not to participate, they can opt for an accountant who has also chosen not to do so. However, if Belgium approaches this like the Netherlands has, we expect increased controls for non-participating taxpayers.


Horizontal supervision requires mutual trust, on both the side of both the taxpayer and the tax authorities. If this mutual trust is missing, horizontal supervision is likely doomed.


Public records fraud: the uninvited business administrator or board member

It’s been in the news multiple times in the past several years: criminals who appoint themselves as business administrator or board member by way of a fraudulent publication in the Belgian public records (‘staatsblad’).  This type of crime is called 'staatsblad fraud', herein after referred to as public records fraud.

The idea is to use the fraudulent publication to make purchases and/or otherwise withdraw from the financial accounts of the unsuspecting business.  Unfortunately, this is a very simple form of fraud which can easily result in huge financial harm.

Public records fraud

The fraudsters use the downloadable publication forms from the website to name themselves as administrator or board member of an unsuspecting company.  They then pay the relatively low publication fee and have the form publicized.  This is unfortunately quite easy to do.

After the appointment has been publicized in the public records, the fraudster’s real work begins.  Using the publication, he/she tries to gain access to the company’s bank accounts to make purchases (such as the acquisition of a personal vehicle), or to otherwise withdraw money from the account.

If the seller or banker is not sufficiently critical or careful, then the financial harm to the company is at that point unpreventable.

No automatic pro-active updates or control

Up until now there has been no accessible pro-active measure to control the accuracy of the publications.  This means that anyone could technically put together a form and have it publicized, and this for any random company.  To further contribute to the issue, companies remain unaware of the publication as they do not receive any kind of notification.

Due to the lack of effective control, companies have no way of timely knowing of these fraudulent publications.

This, until recently.

Protection by registration

Considering the absence of a protective law, three parties from the private sector put their heads together to maximize protection, with support of the Belgian reporting authority (‘Staatsblad’).

Companies can register free of charge at  (translated: legal publications) by submitting their KBO-number, name, address and email address.  Anytime a new publication appears in the public records, they are immediately notified.  Companies receive confirmation of all publications, along with as a pdf version of the publicized form(s).  In the event a fraudulent publication was issued, the company can have the publication removed, inform the appropriate financial institutions and seek criminal punishment of the wrongdoers.

This registration system offers a simple solution to help companies prevent unwelcome purchases and withdrawals and at the same time, discourage wrongdoers.

We would stronly encourage you to take a few minutes to register, it may save you quite the nightmare (and money) in the future.

Win-win loan only for Flemish start-ups

A last fiscal measure is the win-win loan which may be granted to Flemish SME start-ups or self-employed start-ups.

Anyone, if as a natural person, providing a loan to a Flemish enterprise for a duration of 8 years will receive an annually refundable tax credit on their income tax of 2.5% of the amount lent. The maximum loan amount allowed to start-ups is EUR 50.000,00 per taxpayer. The start-up can retrieve maximum 200.000,00 EUR via a win-win loan.

The win-win loan is a subordinated loan which means that the creditor, whenever in liquidation, in order of the debtors, approaches the other debtors. Should the debtor be unable to pay back the loan, the creditor receives a one-off tax credit of 30% on the definitively lost amount lent.

For more information on the official conditions and formalities underlying this tax measure please don't hesitate to contact one of our legal advisers. They will be happy to help.

Exemption from paying interest on crowdfunding

Another way for start-ups to find funds is to approach a recognised crowdfunding platform. Crowdfunding is form of financing projects by collecting funds from a broad audience.

If as a natural person, you grant a start-up a loan via a crowdfunding platform after 1 July 2015, the interest you receive on the first loan bracket of EUR 15.000,00 is exempt from withholding tax, hence free from any tax whatsoever. Please note that any interest received in excess of EUR 15.000,00 is taxable.

This tax cut is subject to a few conditions.

The loan must have a minimum duration of 4 years and must be granted to a start-up (micro-business or SME) whose registration with the Crossroad Bank for Enterprises does not exceed 48 months.

The start-up must use the funds to finance new economic initiatives.

A micro-business is a company that meets at least two of the following three criteria:

  1. Balance total: maximum 350.000,00 EUR;
  2. Turnover (ex VAT): maximum 700.000,00 EUR;
  3. Average number of staff: maximum 10.

An SME is a company or a natural person which/who, based on section 15 of the Company Code, does not surpass more than one of the following threshold levels:

  1. Balance total: 3.650.000,00 EUR;
  2. Turnover (ex VAT): 7.300.000,00 EUR;
  3. Average number of staff: 50.

If you want to know more about the measure or about crowdfunding in general, please don't hesitate to contact us. We'll be happy to provide the necessary information.