Tax deduction for risk capital (or "notional interests") is a mechanism allowing your company to reduce its tax base by deducting a percentage of its total equity.

Let’s take an example: End 2010 your company has 10mln € equity. On your 2010 profit, you can deduct 10 mln € x 4,473 % = 447.300 €. If your profit before tax is 800.000 euros. Your company won’t be pay tax on this amount, but on 800.000– 447.300 = 352.700. Corporate tax standing at 33,99%. Without notional interests your company would have paid a corporate tax of 800.000 x 33,99% = 271.920 €. Thanks to this tax mechanism, you only pay 352.700 x 33,99% = 119.883 €. Twice lower in this case .

You record a tax saving of 152.037 €.

This tax measure is in application since 2007 (tax year 2006). Its main goals are to promote equity financing within belgian companies and to support and thus keep decision and coordination centers on Belgian territory.

Mainly thanks to this measure Belgium have reached in 2010 the 4th place of most attractive country to foreign investment in world’s ranking. [1].

Categories : Advices, Studies | Tags : Tax | 0 commentaire associé