by Stephanie Vanmarcke
Do you have a foreign company that operates in Belgium? Then it is likely that a permanent establishment has been created in Belgium. Indeed, permanent establishments have become increasingly prevalent in Belgium since the introduction of the Multilateral Instrument (MLI) in 2020.
Belgian internal law makes reference to a 'Belgian establishment.' This term applies for example to companies that hold stock in Belgium, or foreign companies that employ employees in Belgium. Yet, whilst this type of company is considered a Belgian establishment, it is not deemed a ‘permanent establishment’ in accordance with the double taxation treaty.
The income generated from your Belgian establishment is therefore not taxable, due to it being exempt as a result of the double taxation treaty. However, you are still obliged to submit a corporate income tax return on an annual basis. Since this tax return does not include a taxable base, it effectively constitutes a 'nil return.'
You will have to pay a company contribution as a result of this nil return. In 2020, the company contribution amount for a nil return was 347.50 euros. The contribution for 2021 is not yet known. This contribution must normally be paid prior to 1 July. However, the government made an exceptional decision to postpone the 2021 payment deadline to 31 December, 2021 due to the corona crisis.
In our opinions, we rely on current legislation, interpretations and legal doctrine. This does not prevent the administration from disputing them or from changing existing interpretations.
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