The set-off of Belgian withholding taxes
Almost all Belgian withholding taxes can be offset against the taxes to be paid. The Income Tax Code (art. 276 ITC) stipulates that taxes are discharged by offsetting withholding taxes on real property, withholding taxes on movable property, withholding taxes on business activities, the fixed part of foreign taxes and tax credits. Given that the withholding tax on real estate is now a regional tax, a confusion of concepts may arise. This real estate withholding tax is not creditable but is fully deductible for enterprises as a professional expense.
The withholding tax on movable property (on dividends or on income from movable property or capital) is in principle fully deductible and repayable. However, there are some conditions attached to this. For example, you may only offset the withholding tax up to the amount of the withholding tax on the income that is taxable in relation to the period during which you held full ownership of the property or capital. For dividends, the condition of full ownership at the time of allocation or payment is added. You cannot offset withholding tax if the attribution would result in a reduction in value or a capital loss of the underlying share, with an exception for shares that meet the holding condition.
Limitation
Withholding taxes are only deductible to the extent that they relate to income included in the taxable basis of the tax. This is relevant, among other things, in the case of investment companies that have only a limited taxable base and where movable income is often not subject to tax. In such a case, no set-off (refund) will be possible anyway because e.g. the dividends do not enter the taxable base.
Exemption
There is an exemption from withholding tax for foreign companies from the EEA or a treaty country with a participation of less than 10% and with an acquisition value of at least EUR 2.5 million and where you cannot offset the withholding tax elsewhere.
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