Head of practice
Head of Corporate Law and Fintech Practice. Expert in the creation and reorganization of companies, support of M&A transactions, as well as legal support for opening and running a business in the EU, Asia, and North America.
Tax structuring in Belgium
Belgian tax legislation recognizes fundamental transformations in 2025, creating unique opportunities for international business and tax planning. New rules for investment recovery, modernization of the Innovative Income (IID) regime, adaptation to global standards of Pillar Two and revolutionary changes in the revenue sharing regime open up unprecedented prospects on-line optimization for Ukrainian and international companies.
Corporate tax reform
The basic corporate tax rate in Belgium remains at 25%, but for small and medium-sized businesses there is a preferential rate of 20% on the first €100,000 of profits, which significantly reduces the tax burden for growing businesses. The July 2025 tax reform program introduces revolutionary changes to the profit participation regime from 2026: it requires the qualification of participations as financial fixed assets for investments above €2.5 million, which affects the strategies of holding structures.
Of particular note is the impact of the global Pillar Two minimum tax of 15%, which obliges large international groups with a turnover of more than €750 million to adapt their tax structures. Belgium is actively implementing mechanisms to protect against tax competition and ensure compliance with international standards.
Three-beam investment deduction system
From January 1, 2025, Belgium will have an innovative three-beam investment deduction system that will radically change the approach to investment planning.
General investment deduction path
The first beam provides basic opportunities: a 10% standard deduction for most investments or an increased 20% deduction for digital investments and Industry 4.0 technologies. This creates incentives for the modernization of production and the implementation of digital solutions.
Thematic path for sustainable development
The second beam focuses on environmental technologies and energy efficiency: a 40% deduction for small companies investing in renewable energy sources, energy-saving technologies and environmentally friendly production. This is particularly attractive for companies seeking to meet ESG standards and reduce their carbon footprint.
Technology and Innovation
The third beam focuses on high-tech investments: 13.5% or 20.5% for patents and R&D investments with the possibility of converting into a tax credit. This creates unique opportunities for innovative companies and start-ups in the technology and pharmaceutical sectors.
Innovation Income (IID) regime
The IID provides an 85% deduction on net innovation income, effectively reducing the tax burden to 3.75% for qualified innovation income. A key innovation for 2025: the possibility of converting the IID into a non-refundable tax credit to manage the effective Pillar Two rate of 15%, which is critical for international groups.
The IID mechanism is particularly beneficial for companies that derive income from patents, technology licenses, software copyrights and other intangible assets. Properly structuring innovation activities through Belgian subsidiaries can provide significant tax savings.
Exit Tax and Company Migration: New Challenges
The new Exit Tax introduces the concept of a “leveraged dividend” when companies migrate abroad, which affects business restructuring strategies. This is especially relevant for companies planning to change their jurisdiction of registration or reorganize holding structures. Migration procedures must be carefully planned to minimize tax consequences.
Liquidation reserves: simplification and optimization
Liquidation reserves receive significant simplification: a reduction in the term from 5 to 3 years and a new rate of 6.5% for reserves created from January 1, 2026. This creates new opportunities for planning liquidation strategies and optimizing tax liabilities when terminating the activities of subsidiaries.
Holding Structures and International Planning
Belgium remains extremely attractive for holding structures thanks to its extensive network of over 95 tax treaties, including the one with Ukraine. Properly structured holding companies in Belgium can ensure effective optimization of international flows of dividends, royalties and interest while minimizing the tax burden.
The strategic use of Belgian holdings allows:
- Optimize dividend flows from different jurisdictions
- Minimize capital gains taxes
- Create efficient structures for M&A transactions
- Ensure asset protection through international treaties
The law firm “Prikhodko & Partners” is a leading expert in the field of international tax planning with a focus on Belgian legislation and Ukrainian-Belgian tax relations. Our team has many years of experience in structuring international transactions through Belgian holdings and comprehensive optimization of tax obligations for Ukrainian businesses.
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