BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Melissa Verplancke and Gauthier Callens, Linklaters
gian companies are in principle subject to a cor - porate tax rate of 25%. A reduced rate of 20% on the first EUR100,000 of taxable income may be available to small and medium-sized enter- prises, subject to conditions. SREIFs benefit from a derogatory tax regime. SREIFs taxable base is essentially limited to “abnormal and benevolent” advantages and various disallowed expenses. Rental income and capital gains are in principle not subject to taxation. A specific “exit tax” (at a rate of 15%) is appli - cable and triggered upon the subscription of an existing company to SREIFs’ official list (such as via conversion of an existing company, merger, demerger or contribution) on unrealised capital gains (and, potentially, untaxed reserves). This tax is also due if a SREIF acquires properties through corporate restructuring (eg, a merger with a public limited liability company). SREIFs are also subject to an annual “subscrip - tion” tax levied on collective investment entities at a rate of 0.01% on the total net assets placed alternative structure to SREIFs is the “ société immobilière réglementée ”/“ gereglementeerde vastgoedven- nootschappen” (commonly referred to as the “Belgian REIT”, or B-REIT). investment These entities, designed for long-term invest - ment and risk diversification fall into three dis - tinct categories. • The “public” B-REIT, financed by the public (notwithstanding other financing methods), in Belgium. 5.3 REITs An
with their shares mandatorily listed on a regu - lated market. • The “institutional” B-REIT, which can only be financed by eligible investors or individu - als (on the condition that their subscription or purchase price is at least EUR100,000) – more than 25% of the share capital of an institutional B-REIT must be held, directly or indirectly by a public B-REIT. • The “social” B-REIT, whose operations must be dedicated to real estate necessary for the social sector and housing for individuals, amongst other conditions. B-REITs are incorporated for an unlimited dura - tion, must adhere to a minimum capital require - ment of EUR1.2 million and are subject to an approval from the Belgian financial services and markets authority. Their main activity must be the purchase of real estate assets (directly or indirectly) or construction and renovations of real estate assets in view of the occupation by users or the direct or indirect holding of shares in entities with a similar activity. B-REITs are also allowed to participate in various categories public-private partnerships and to participate in energy, fuel, water and waste sectors projects. B-REITs are also notably forbidden to act as real estate developers and B-REITs’ investments are limited by a list of allowed investments defined by law. The tax and accounting framework for B-REITs has similarities with the one applicable to SREIFs: B-REITs must prepare their annual accounts in accordance with IFRS standards, and their tax - able income essentially comprises “abnormal and benevolent” advantages received and vari - ous disallowed expenses. B-REITs are also sub - ject to a distribution obligation, requiring them to annually distribute 80% of a portion of their income, as defined by a particular formula.
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