The ordinary (withholding) tax rate on income from movable property will be increased from 25% to 27% as from 2016. The scope of application of the ordinary rate is also extended.
This increase will apply to all income from movable property currently subject to the withholding tax rate of 25% (interest, dividends, royalties, share repurchase bonuses and liquidation bonuses). Furthermore, the reduced rate applicable to dividend distributions from the liquidation reserve within 5 years under the “VVPR-ter” regime should be increased from 15% to 17%. The reduced rate of 5%, applicable to dividend distributions from the liquidation reserve after 5 years, should, in principle, remain unchanged.
Interest on government themed loans (Thematische volksleningen / prêts-citoyen thématiques) and dividends from REITs (vastgoedbevaks / SICAV immobilières), which currently benefit from the reduced rate of 15%, will also become subject to the rate of 27%.
The reduced rate remains applicable to interest on what are known as “Leterme bonds”, part of the interest on saving accounts in excess of the exempt cap of EUR 1,880 (for income year 2015) and dividends on shares qualifying for the “VVPR-bis” regime.
The increase of the ordinary withholding tax rate is one of the measures adopted by the Belgian government in the framework of the “Tax shift”. No draft bill has yet been published so the current modalities are still subject to modification during the legislative process. The draft bill should be approved before the end of the year.