Tax competition between European countries is a popular sport. And in this game, some competitors are very good, although they are not the best known.
In the collective imagination, “tax havens” are often associated with small island and sunny states, in which the rich will hide their nestling to escape taxes. But Europe however has some “good students” in this area within its borders.
If the cases of Luxembourg, Ireland or Switzerland (which is part of the Schengen space but not the EU proper) are known, another country is drawing in the game: Belgium. Far from the images of Épinal and the clichés that we have on our neighbor in France, the Belgian kingdom is actually a very favorable reception for the businessand very accommodating with large fortunes.
First, each taxpayer can negotiate, in all discretion, particular and confidential tax agreements. This opaque mechanism, called “System of early tax decisions” (or tax ruling)) Allows taxpayers of any kind, individuals or companies, to obtain an agreement in principle, which initiates the tax administration, on the taxation of their operations and their assets.
This system is very popular with multinationals and foreign investors, who can use it to negotiate derogatory and more favorable tax conditions even before their establishment in the country. THE tax ruling are particularly criticized because perceived as an exception to common tax law, exercised in a discretionary manner depending on “the head of the customer”, or rather the size of their wallet.
Then, the country offers a very advantageous tax framework for income from intellectual property, including patents. For ten years, companies can indeed obtain an exemption from corporate corporate Up to 85 % of “innovation profits”. As this regime is also applicable to foreign companies with an establishment in Belgium, it encourages companies to transfer their innovative intangible assets, especially technological, in the country.
Finally, the heritage income tax system is one of the lightest in Europe, because almost all of the dividends and capital gains are simply exempt from tax. Thus, most financial investment income, or the profits made on the sale of real estate or actions of a company, are generally exempt from any tax or social levy, with a few exceptions.
This set of tax rules and optimization mechanisms, very favorable to the economic attractiveness of Belgium, have however been the subject of several reforms in recent years. Under pressure from the European Union in particular, the country participated in exchanges of information in the context of surveys on tax evasion, and also started a transparency process on its famous specific tax agreements.