BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Donald Krols and Astrid Laga, Linklaters
istered with the Belgian financial services and markets authority). SREIFs must be incorporated subject to a set duration of ten years, although their articles of association may allow the shareholders to vote on extensions in increments of up to five years each. SREIFs are distinguished by certain features specific to their legal framework, including (but not limited to): • mandatory registration with the Ministry of Finances’ list of SREIFs; • IFRS-compliant preparation of annual finan - cial statements; • a requisite distribution of 80% of net results, which generally triggers withholding tax for the shareholders, although relevant double taxation treaty provisions may apply; • SREIFs may, in principle not act as real estate developers (except if such activity is carried- out on an occasional basis); • specific mandatory reporting obligations (such as a specific annual financial report and information document for the shareholders); • mandatory annual valuation of the net asset value of the SREIF’s shares; and • SREIF’s real estate portfolio must reach a minimum valuation of EUR10 million by the close of the second financial year subsequent to their registration. A specific tax regime, detailed in 5.2 Main Fea- tures and Tax Implications of the Constitution of Each Type of Entity , applies to SREIFs. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity The incorporation of Belgian corporate entities essentially requires a notarial deed. This require -
ment applies to both public limited liability com - panies and private limited liability companies whereas limited partnerships can be incorpo - rated by a private agreement among founding partners (without notarial deed). For the incorpo - ration of both limited and public limited liability companies, founders must also communicate a financial plan over a two-year horizon to the notary (amongst other information and KYC documents). In terms of real estate ownership, there are no specific tax incentives. Excluding specific tax regimes, such as the one applicable to SREIFs (which is detailed in the paragraphs below), Bel - 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 in Belgium.
134 CHAMBERS.COM
Powered by FlippingBook