A regional HQ or shared service center in Flanders

There are 5 possible scenarios for establishing a business presence in Flanders. One option is to set up a regional HQ or shared service center. Discover the different tax incentives your company may be eligible for.

What it is

A Flanders-based regional head office or shared service center of a parent company (headquartered abroad):

ensures activities ranging from management functions to procurement, strategic planning, corporate communications, marketing and sales, research and development, IT, legal, accounting and tax services.
constitutes a Belgian business entity that acts as a headquarters for local affiliated companies.

Direct tax aspects

Activities of the regional HQs and shared services centers can be determined on a cost-plus basis. In addition, this can be secured by an advance tax ruling.
Effective tax rate can be lowered significantly by applying for the Notional Interest Deduction.
Attractive incentives for R&D activities and the management of intellectual property.
Full access to European Directives such as the Interest and Royalty Directive and the Parent-Subsidiary Directive.
Regional headquarters with qualifying parent companies located in treaty jurisdictions are eligible for a domestic dividend withholding tax exemption.
Interesting expatriate regime for individuals.

Indirect tax aspects

Belgian VAT registration and full (VAT) bookkeeping are required.
Some activities, like treasury, will potentially not generate an input VAT credit. This means that the activities should be analyzed thoroughly to determine the business entity’s right to deduct input VAT in Flanders.
The financial impact of non-recoverable VAT can be limited if VAT authorities agree to a ‘real use’ methodology for input VAT deduction.
The recoverable Belgian input VAT can be recorded through the Belgian VAT return procedure.