26th July 2017 was a memorable date for SME and business owners in Belgium, as it was the day the government agreed upon a budget for 2018 known as the ‘Summer Agreement’. The tax reform primarily affects corporate income tax legislation, with the aim of creating a fairer and more just tax system.

Read on to find out more about some of the fiscal measures that have been put into place.

Corporate Income Tax

One of the main changes that has been implemented is the significant decrease of the corporate tax base rate. As of 2018, the basic corporate tax rate has decreased from 33% to 29%. By 2020, it will have reduced to 25%. SMEs will benefit from a 20% tax rate on the first €100,000. The aims of this decrease are to reignite the Belgian economy, increase competition between Belgian businesses and to boost start-ups and SMEs.

Minimum Tax

Companies with a taxable profit of over €1 million are now subject to a minimum tax of 70%. This results in a tax rate of 7.5%. Any tax deductions which cannot be applied can be carried over into the next tax year. New companies will not be subject to this limitation for their first 4 years of operation.

Late Deposits

We recently discussed late payments in our previous blog post, but deposits are now subject to higher fees. If you fail to submit your corporate income tax return, you could face severe punishments and rates of up to 29.58%.

Late Payment and Moratorium Interest

The calculation of late payment and moratorium interest will change. Late payment interest will be determined within between 4% -10% and will remain 2% higher than moratorium interest.

Non-submission of corporate income tax returns will be punished more severely. The minimum taxable base will increase, but will be subject to the decreasing corporate tax rate as follows:

Assessment year | Minimum taxable base (€) | Rate | Amount due (€)
2019 34,000.00 29,58% 10,057.20
2020 34,000.00 29,58% 10,057.20
2021 40,000.00 25% 10,000.00

The 2018 tax reform has many other changes and benefits attached. To find out how the tax reform affects your business, get in touch with us today.

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About the Author

J’ai lancé Abacus Consulting en décembre 2008. Je propose mes services de consulting et d’intérim management en comptabilité & fiscalité. Des missions de consulting : Trouver des solutions à une problématique client. Des missions d’intérim management : Remplacer un cadre supérieur en comptabilité & fiscalité et/ou en légal au sein d’une structure existante, pour un temps déterminé. Suite à un congé de maternité, de maladie, absence temporaire ou simplement pour mettre sur pied un nouveau projet,… Apporter mon expérience, offrir un regard extérieur à une société afin de pouvoir apporter des solutions différentes et répondre aux demandes de mes clients. Mes clients sont des multinationales, PME ou des indépendants ainsi que des professions libérales. Chaque mission est un nouveau challenge auquel il faut répondre rapidement et efficacement ! C’est ça qui me plait ! Vous pouvez me retrouver sur Twitter, Facebook, Instagram, Linkedin