NOTIONAL INTEREST DEDUCTION: INCENTIVE FOR CAPITAL INTENSIVE INVESTMENTS IN BELGIUM, ALTERNATIVE TO COORDINATION CENTERS

On December 23, 2004, the Belgian government introduced a notional interest deduction system, providing for a tax deduction for the cost of capital for both Belgian and foreign companies. The main purpose of the notional interest deduction is to reduce the currently existing discrimination between t...

Full description

Saved in:
Bibliographic Details
Published in:Journal of International Taxation 2005-05, Vol.16 (5), p.14
Main Authors: Joosten, Herwig, Huygen, Werner, Marsoul, Koen, Claes, Steven, Huysmans, Serge
Format: Article
Language:English
Subjects:
Bills
Capital costs
Capital investments
Dividend distributions
Equity
Interest costs
International taxation
Permanent establishment
Tax deductions
Tax rates
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:On December 23, 2004, the Belgian government introduced a notional interest deduction system, providing for a tax deduction for the cost of capital for both Belgian and foreign companies. The main purpose of the notional interest deduction is to reduce the currently existing discrimination between the tax treatment of debt-financing (interest payments being deductible) and the tax treatment of equity-financing (dividends being included in the taxable basis) and hence to encourage companies to improve their financial position by increasing their equity.
ISSN:1049-6378