As part of a broader reform, the Belgian government is working on a proposal for a corporate tax reform.

The proposal includes, among other measures, a significant reduction of the corporate income tax rate (CIT) from (currently) 33.99% to 20% by 2020. The corporate tax rate will most likely not be set to 20% immediately, but will be reduced progressively in the years to follow. It was also mentioned that the Dividend Received Deduction (DRD) could go up to 100 % (instead of 95% as is the case now).

To make this possible, the government is discussing various ‘compensatory’ measures to make the reform budget-neutral. These measures may include reducing (or abolishing) the notional interest deduction and investment deduction regimes, limiting tax loss carryforwards and reducing the ability for increased fiscal depreciations. The withholding tax rate might go up from 27% to 30%.

As mentioned, the CIT reform is currently still in the proposal phase and has not yet been formalized in a draft bill of law.