Notional Interest Deduction – available to companies subjected to corporate tax – is used in Flanders to offset operational or financial income, lowering the effective tax rate. Here are the most important benefits:
- Valuable tool for the further development of your start-up’s financing activities.
- Allows international groups to allocate new activities to a Belgian entity in the form of intra-group financing, central procurement or factoring.
- Decreases the effective tax rate.
- Especially attractive to capital-intensive companies, equity-funded headquarters, treasury centers and R&D activities.
There are additional benefits for current investors in Belgium. Increasing the share capital of one or more Belgian companies results in a higher notional interest deduction and lower Belgian effective tax rate on returns of investment.