Corporate Tax in Belgium: Rates, Calculation and SME Optimisation

Corporate tax (impôt des sociétés, ISOC) is the tax that Belgian resident companies must pay on their worldwide profits. Since the 2018 tax reform (Act of 25 December 2017), the corporate tax rate has been progressively reduced to a standard rate of 25% since tax year 2021. SMEs that meet certain conditions benefit from a reduced rate of 20% on the first EUR 100,000 of profit. This guide explains in detail how corporate tax works, how it is calculated and the optimisation strategies available to Belgian SMEs.

Who is subject to corporate tax?

Resident companies

All resident companies in Belgium are subject to corporate tax, meaning companies whose registered office, main establishment or place of effective management is in Belgium. This notably concerns:

• SRLs (private limited companies) – formerly SPRLs
• SAs (public limited companies)
• SCs (cooperative companies)
• SNCs (general partnerships)
• SCSs (limited partnerships)

Excluded entities

The following are not subject to corporate tax:

• Self-employed individuals (subject to personal income tax – IPP)
• Non-profit associations (ASBLs) whose activity is not for profit (subject to the legal entities tax – IPM)
• Foreign companies without a permanent establishment in Belgium (subject to non-resident tax)
• Intermunicipal companies and certain public bodies

Corporate tax rates in 2026

Standard rate: 25%

Since tax year 2021 (2020 income), the standard corporate tax rate has been 25%. This rate applies to the company's entire taxable profit.

Before the reform:

• Tax year 2018: 33.99% (33% + 3% supplementary crisis contribution)
• Tax year 2019: 29.58%
• Tax year 2020: 29.58%
• Tax year 2021 onward: 25%

Reduced SME rate: 20% on the first EUR 100,000

Small companies within the meaning of Article 1:24 of the Companies and Associations Code (CSA) can benefit from a reduced rate of 20% on the first EUR 100,000 of taxable profit. Above EUR 100,000, the standard 25% rate applies.

Comparative calculation

Maximum saving: the reduced rate saves up to EUR 5,000 of tax per year (5% x EUR 100,000).

Conditions for the reduced 20% SME rate

To benefit from the reduced rate, a company must meet all the following conditions (Article 215, paragraph 3 of the 1992 Income Tax Code, CIR):

Condition 1: Being a small company (Article 1:24 CSA)

The company must not exceed more than one of the following criteria on a consolidated basis:

If the company exceeds more than one of these criteria, it is considered a large company and pays the standard 25% rate.

Condition 2: Minimum remuneration for the manager

The company must pay at least one of its company directors (a natural person) an annual remuneration of at least EUR 45,000.

Exception: if the company's taxable profit is below EUR 45,000, the minimum remuneration must be at least equal to the taxable profit.

Example:

• Taxable profit of EUR 80,000 -> minimum remuneration: EUR 45,000
• Taxable profit of EUR 30,000 -> minimum remuneration: EUR 30,000

Condition 3: Not too much of a stake in other companies

The company cannot hold shares representing more than 50% of the capital or voting rights of one or more other companies (unless these holdings are part of the normal management of an investment portfolio).

Condition 4: No excessive dividend distribution

Dividends distributed cannot exceed 13% of the paid-up capital at the start of the taxable period.

Condition 5: Not a financial company

The company cannot be one whose shares are held for more than 50% by one or more other companies (unless those companies are themselves small companies). In other words, a subsidiary of a large company cannot benefit from the reduced rate, even if it is itself a small company.

Condition 6: Not a pure management company

The company cannot be one whose main activity consists of managing one or more other companies (a management company), if the companies managed do not themselves meet the conditions for the reduced rate.

Summary of conditions

How to calculate the taxable base (taxable profit)?

The taxable profit for corporate tax purposes is calculated starting from the accounting result (profit or loss for the year) and applying tax adjustments.

Step 1: Accounting result

The starting point is the accounting profit or loss shown in the annual accounts filed with the National Bank of Belgium (BNB). This result is determined according to Belgian accounting standards (Standardised Minimum Chart of Accounts – PCMN).

Step 2: Tax adjustments (disallowed expenses – DNA)

Certain charges, although recorded in the accounts, are not tax-deductible:

Step 3: Tax deductions

After adding the DNA to the accounting result, the following deductions are applied (in the order prescribed by the CIR 1992):

1. Definitively taxed income (RDT): 100% exemption for dividends received from subsidiaries (under conditions – Art. 202-204 CIR)
2. Innovation deduction: 85% exemption for income from patents, copyright-protected software, etc. (Art. 205/1 to 205/4 CIR)
3. Investment deduction: a percentage of the acquisition price of certain investments (see our dedicated article)
4. Deduction of prior losses: carry-forward of tax losses from previous years (unlimited in time but capped at 70% of profit exceeding EUR 1 million – Art. 206 CIR)
5. Risk-capital deduction (notional interest deduction): a deduction calculated on adjusted equity (Art. 205bis to 205novies CIR) – 0% rate in 2026 for large companies, calculated on the incremental increase in equity for SMEs

Simplified calculation scheme

Accounting result (profit)                        +100,000
+ Disallowed expenses (DNA)                        +15,000
= Tax profit before deductions                    = 115,000
- Definitively taxed income (RDT)                    -5,000
- Investment deduction                               -3,000
- Prior losses carried forward                      -10,000
= Taxable base                                     = 97,000
x SME rate (20%)                                    = 19,400

Filing the corporate tax return

Form and submission

The corporate tax return (form 275.1) must be filed via Biztax, the online application run by FPS Finance. The filing deadline is generally the last day of the 7th month following the close of the financial year.

Example: for a financial year closing on 31 December 2025, the return must be filed by 31 July 2026 at the latest (unless FPS Finance announces an extension).

For financial years closing on a date other than 31 December:

• Closing on 31 March 2026: return due by 31 October 2026 at the latest
• Closing on 30 June 2026: return due by 31 January 2027 at the latest

Supporting documents

The corporate tax return is accompanied by numerous supporting forms (275.C, 275.W, etc.) detailing:

• Disallowed expenses
• Provisions
• Depreciation
• Definitively taxed income
• The investment deduction
• Advance tax payments
• Capital gains realised

Who signs the return?

The return must be signed by a director or manager of the company. In practice, most companies mandate their accountant or chartered accountant to prepare and file the return via Biztax.

Tax optimisation strategies for SMEs

1. Optimise the manager's remuneration

To benefit from the reduced 20% SME rate, you must pay at least EUR 45,000 in remuneration. But going beyond that can also be worthwhile:

Simulation: a company with a pre-remuneration profit of EUR 150,000

Scenario A is often the most advantageous because the personal income tax burden stays moderate while the company's profit benefits from the reduced SME rate.

Note: you must also factor in employer social security contributions on the remuneration and self-employed social contributions if the manager is self-employed.

2. Use the investment deduction

SMEs can deduct an additional percentage of their investments. The base rate for SMEs is 8% for tax year 2026. For certain specific investments (digital, energy savings), the rate can reach 13.5% or more.

3. Carry forward tax losses

Tax losses from previous years can be carried forward with no time limit. However, since tax year 2019, the deduction of prior losses is capped at:

• 100% of tax profit for the portion below EUR 1,000,000
• 70% of profit exceeding EUR 1,000,000

For most SMEs, this cap has no impact, as their profit generally stays below one million.

4. Build up liquidation reserves

SMEs can build a liquidation reserve (Article 184quater CIR 1992) by paying a separate 10% levy when the reserve is set up. If this reserve is later distributed:

• After 5 years: an additional levy of only 5% (total: 15% instead of the usual 30% withholding tax on dividends)
• On liquidation of the company: no additional levy (total: 10%)

Example: your company has a profit of EUR 80,000 after corporate tax. You build a liquidation reserve of EUR 50,000.

• Immediate separate levy: 50,000 x 10% = EUR 5,000
• If distributed after 5 years: 50,000 x 5% = EUR 2,500 withholding tax
• Total levied: EUR 7,500 out of EUR 50,000 = 15% (instead of 30% via an ordinary dividend)
• If distributed on liquidation: EUR 0 additional levy, total = 10%

5. Use the innovation deduction (patent box)

If your company holds patents, copyright-protected software or other intellectual property rights, you can benefit from the innovation deduction. This deduction exempts 85% of qualifying net income.

Example: your web-development SRL generates EUR 40,000 in qualifying software licensing income.

• Qualifying net income: EUR 40,000
• Innovation deduction: 40,000 x 85% = EUR 34,000
• Residual taxable base: EUR 6,000
• Corporate tax on this income: 6,000 x 20% = EUR 1,200 (instead of EUR 8,000 without the deduction)

6. Optimise depreciation

SMEs can choose between straight-line depreciation and declining-balance depreciation (double the straight-line rate) for investments in tangible fixed assets (excluding vehicles and buildings).

Example: purchase of an IT server for EUR 10,000, depreciated over 3 years.

Declining-balance depreciation allows for larger deductions in the early years, deferring tax over time.

Note: since tax year 2021, SMEs must apply pro rata temporis depreciation in the first year (instead of a full year's depreciation). Only SMEs within the meaning of Article 1:24 CSA are subject to this requirement.

The supplementary crisis contribution (CCC)

The supplementary crisis contribution (an extra 3%) has been abolished since tax year 2021. The effective corporate tax rate is therefore indeed 25% (not 25.75% or 33.99% as before the reform).

The special separate levy (fairness tax)

The fairness tax (Article 219ter CIR 1992) is a special separate levy of 5.15% (5% + 3% CCC, but since the CCC has been abolished, it is effectively 5% since 2021) applicable to large companies that distribute dividends while reducing their taxable base through tax deductions (RDT, prior losses). SMEs within the meaning of Article 1:24 CSA are exempt.

Advance tax payments

Companies must make advance tax payments to avoid a tax surcharge. This topic is covered in detail in our dedicated article on advance payments. In summary, four quarterly payments must be made:

• AP1: by 10 April at the latest
• AP2: by 10 July at the latest
• AP3: by 10 October at the latest
• AP4: by 20 December at the latest

The surcharge rate for insufficient advance payments is 9% for tax year 2026.

Withholding tax on dividends

When a company distributes dividends to its shareholders (natural persons), it must withhold a withholding tax of:

• 30%: standard rate
• 20%: dividends from the liquidation reserve after 5 years (see the liquidation reserves section)
• 15%: VVPR-bis dividends (shares issued from 1 July 2013 with a cash contribution, after a period of 2 full financial years)
• 5%: VVPR-bis dividends after a period of 4 full financial years (abolished since 2024, kept at 15%)

The VVPR-bis regime

The VVPR-bis regime (Articles 269, §2 and 269/1 CIR 1992) allows the withholding tax on dividends to be reduced to 15% for small companies that meet the following conditions:

• Registered shares issued from 1 July 2013
• Cash contribution (not in kind)
• Fully paid-up shares
• The company is a small company (Art. 1:24 CSA)
• Dividends are distributed after at least 4 full financial years following the contribution

Example: you set up an SRL in 2022 with a EUR 20,000 cash contribution. From 2027 onward (after 4 full financial years: 2023, 2024, 2025, 2026), dividends distributed will be subject to a 15% withholding tax instead of 30%.

Common mistakes to avoid

1. Forgetting the minimum remuneration criterion: without the EUR 45,000 remuneration, no reduced rate, which costs EUR 5,000 more in corporate tax
2. Not making advance tax payments: the 9% surcharge can represent a significant extra cost
3. Confusing accounting profit with tax profit: the DNA and deductions create a gap between the two
4. Not building a liquidation reserve: this is the simplest and most effective optimisation tool for SMEs
5. Forgetting to file the annual accounts with the BNB: without filed accounts, the corporate tax return cannot be validated
6. Not making use of available deductions: investment deduction, innovation deduction, notional interest deduction

Corporate tax calendar (financial year closing on 31/12)

Official resources

• FPS Finance – Corporate tax: finances.belgium.be/fr/entreprises/impot_des_societes
• Biztax (online filing): biztax.be
• 1992 Income Tax Code (CIR): available on Fisconetplus
• National Bank of Belgium (filing of annual accounts): nbb.be
• FPS Finance Contact Centre: 02 572 57 57

Conclusion

Corporate tax in Belgium offers significant optimisation opportunities for SMEs, notably through the reduced 20% rate on the first EUR 100,000 of profit. To maximise this advantage:

1. Make sure you meet all the conditions for the reduced rate, particularly the manager's minimum remuneration
2. Build liquidation reserves to optimise future profit distribution
3. Use the investment deduction when purchasing fixed assets
4. Make your advance tax payments to avoid the 9% surcharge
5. Explore the VVPR-bis regime for dividends at a 15% withholding tax rate
6. Work with a good accountant who will optimise your corporate tax return

Rigorous tax planning can easily save a Belgian SME several thousand euros a year.

---

This article was written by the Espero-Soft team for the blog dedicated to entrepreneurs in Belgium. For personalised advice, please consult a professional.