Belgian Gov't Sets Notional Interest Deduction Rate

During its meeting on November 13, 2009, the Belgian Council of Ministers decided to set the maximum notional interest deduction (NID) percentage at 3.8%. The Belgian NID regime provides for an annual, deemed, off-balance sheet interest deduction, calculated on the risk capital of any Belgian compan...

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Bibliographic Details
Published in:Journal of International Taxation 2010-02, Vol.21 (2), p.8
Main Authors: van Haelst, Hans, Joosten, Herwig, Huygen, Werner, Claes, Steven
Format: Article
Language:English
Subjects:
Interest rates
International taxation
Tax deductions
Tax rates
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Summary:During its meeting on November 13, 2009, the Belgian Council of Ministers decided to set the maximum notional interest deduction (NID) percentage at 3.8%. The Belgian NID regime provides for an annual, deemed, off-balance sheet interest deduction, calculated on the risk capital of any Belgian company or Belgian branch of a foreign company. The deduction can, in principle, be used to offset any type of taxable income. In addition, when Belgian companies or branches are engaged in short-term, intercompany funding or in short-term investment of group excess-liquidities, no taxation at all may occur on the interest income in Belgium, due to the very low, short-term interest rates.
ISSN:1049-6378