The dividends that Flanders-based companies receive from subsidiaries will now be 100% exempt from taxation (vs. 95% previously). Foreign businesses with local holdings in Flanders, multinationals and family businesses with local bases can repatriate an even greater share of profits from abroad.
Dividend distributions are generally subject to a 30% withholding tax. However, reduced rates are possible, and a full exemption can be claimed if the dividends are distributed by a Belgian tax-resident company to a receiving firm that:
was established in Belgium or an EU member state;
directly holds 10% of the capital of the distributing company;
has maintained this holding for at least one year with no interruptions;
is appropriately incorporated in a cross-border situation.
Even more, dividend withholding tax for dividends paid to corporate shareholders in treaty countries is no longer applied in Belgium. Dividends distributed by subsidiaries of companies in Belgium are 100% tax exempt.