This incentive aims at start-ups (one-man businesses or companies) that employ people and is part of a total package to which the government wants to encourage start-ups.

The partial exemption from payment of withholding tax on professional income implies a reduction of labour costs.

The measure applies to the first four years after registration with the Crossroad Bank for Enterprises (BCE/KBO) and only to companies in the private sector. The exemption from payment applies only to withholding tax on professional income withheld from the wages of employees and which are paid out or granted after 1 July 2015.

The exemption amounts to 10% of the normally owed withholding tax on professional income for small businesses (section 15 of the Belgian Companies Code) and 20% for micro-businesses.

The enterprise is regarded small if the average number of staff is less than 100 and meets at least two of the following three criteria (consolidated base, including subsidiary companies):

  • average number of maximum 50 employees;
  • turnover exclusive vat of maximum € 7.300.000;
  • balance total of maximum € 350.000.

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

  • average number of maximum 10 employees;
  • turnover exclusive vat of maximum € 700.000;
  • balance total of maximum € 350.000.

Companies in trouble and businesses in liquidation are excluded from this tax exemption measure.