Real Estate 2024

BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Melissa Verplancke and Gauthier Callens, Linklaters

8.3 Municipal Taxes Local and regional taxes, often apply to differ - ent property types, business activities and infra - structures, including vacant properties, offices, retail spaces, parking and telecom structures (eg, pylons/antennas), the latter being often dis - puted initiated by telecom operators and subject of political discussions. Additionally, a yearly real estate tax (“ précompte immobilier “/” onroerende voorheffing ”) is levied on all property categories. Office and retail leases often provide that the tenant will bear these taxes. 8.4 Income Tax Withholding for Foreign Investors Acquisition by Foreign Investors of a Special Purpose Vehicle Holding Real Estate or a SREIF/B-REIT When foreign investors purchase shares in a company that serves as a special purpose vehi - cle (SPV) holding real estate, or in a SREIF/B- REIT, the income generated by the SPV, includ - ing rental income and capital gains, is subject to Belgian taxation (at the standard corporate income tax in Belgium), at the level of the SPV (subject to specific tax regimes, such as the SREIF/B-REIT’s specific tax provisions and potential double tax treaty provisions which may apply). Dividends and potentially interest earned by foreign investors from the SPV will be taxed according to the relevant double taxation agree - ments. Dividends can in principle qualify for a withhold - ing tax exemption if the DRD criteria are met (see 8.2 Mitigation of Tax Liability ). If such an exemption is not applicable, a 30% withholding

tax shall apply (a reduced rate may be available under certain conditions). Double taxation trea - ties may offer various mechanisms that can less - en the impact of double taxation of the payment of dividends or interests to investors by SPVs. It is important to note that SREIFs are legally bound to distribute dividends on a yearly basis and the shareholders of SREIFs have no right (or only a limited right, subject to specific con - ditions) to benefit from the DRD exemption. These dividends are typically also subject to a 30% withholding tax, although this rate may be decreased through exemptions or reduc - tions available under pertinent double taxation treaties. Furthermore, and in principle, Belgium does not levy a withholding tax on dividends distributed by a SREIF (or a B-REIT) to foreign shareholders, provided that the dividends do not come from Belgian dividends or Belgian real estate income. Acquisition by Foreign Investors, Through a Non-Belgian Entity Regarding acquisitions made through a non- Belgian entity, foreign companies are allowed to acquire ownership or real rights over Belgian properties. Here, the relevant double-tax treaties come into play, with the general principle being that rental income and capital gains are taxable in Belgium at the ordinary corporate income tax rate. 8.5 Tax Benefits Belgian law does not provide specific tax ben - efits granted with the ownership of real estate in Belgium. Usually, the ownership of real estate properties can be subject to amortisation, which will be tax deductible. There is, however, no amortisation on land.

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