Following the corporate tax reform of 2017, the application of certain corporate tax deductions is limited to 1.000.000 EUR, increased with 70% of the remaining taxable result exceeding 1.000.000 EUR (system of the "korf/corbeille"). The tax deductions concerned are the notional interest deduction of the year, the dividends received deduction carry-forward, the innovation income deduction carry-forward, the deduction of the loss carryforward and the notional interest deduction carry-forward, in that order. This limitation does not affect the total tax credit amount as such, only its utilization per year.
The new program law, which was published in the Belgian Official Gazette just before the end of 2022, reduces the percentage from 70% to 40% as from assessment year 2024 (linked to taxable periods starting on 1 January 2023, at the earliest).
However, it will revert back to 70% as from assessment year 2025 (linked to taxable periods starting on 1 January 2024, at the earliest) provided Belgium has adopted a law implementing an EU Directive guaranteeing a global minimum taxation of multinational groups in the EU (the so called "Pillar 2" which is part of BEPS 2.0). Since the increase towards 70%, as from assessment year 2025, is conditional on the implementation of Pillar 2 in Belgium this cannot be considered as ‘substantively enacted’ at December 31, 2022.
