The Belgian government has decided to reduce the rate of withholding tax on dividends paid by small- and medium-sized enterprise (SME) to 15 or 20 percent, depending on certain conditions (from 25 percent).

1. Belgium Changes Withholding Tax Rates
Update from Nair & Co. International Tax Team
(Bristol, UK) - The Belgian government has decided to reduce the rate of withholding tax on dividends paid by
small- and medium-sized enterprise (SME) to 15 or 20 percent, depending on certain conditions (from 25 percent).
This move is intended to promote investment by entrepreneurs in their companies. The new provisions apply to
fresh capital issued from 1 July 2013 and is aimed at stimulating the SME sector in Belgium, reports Nair & Co’s
International Tax Team.
Simultaneously, the Belgian government plans to increase the rate of tax imposed on liquidation bonuses (capital
reimbursed to shareholders above paid-in capital) from 10 percent to 25 percent effective 1 October 2014. This
move is proposed to align the tax rate applicable to liquidation proceeds with taxes imposed on certain other
investment income.
Companies operating in Belgium and those planning to set base in the country could benefit under the new
reduced withholding tax rate for investments in SMEs.
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