BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Donald Krols and Astrid Laga, Linklaters
• relate to a company subject to the ordinary corporate income tax regime; • relate to shares representing at least 10% of the capital or having an acquisition value of at least EUR2.5 million (note that the Belgian government intends to increase this partici - pation condition to EUR4 million while this participation should also qualify as a fixed financial asset for accounting purposes but only for participations of large companies in other large companies); and • which has been held during a continuous period of at least one year (to be determined on a share by share basis). The purchaser of a SPV’s shares indirectly bears future capital gains tax on the SPV’s real asset(s) in case of sale of such assets post-closing. To mitigate this, the seller and the buyer of the SPV’s shares usually share the “tax latency” (the corporate income tax that would be due in an asset sale) by adjusting the SPV’s share price with a negotiated discount. In asset deals, some investors opt for a long- term lease or right to build over full ownership transfers, due to lower registration duties (see 2.10 Taxes Applicable to a Transaction ). 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 Belgian corporate income tax at the level of the Belgian real estate company 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 on real estate assets, is taxable in Belgium (at the standard corporate income tax in Belgium of 25%) sub - ject to set-off by any tax assets subject to the ordinary rules, at the level of the SPV (subject to exceptions, such as SREIF/B-REIT’s which are not taxable on, eg, rental income and capital gains on real estate assets; see 5.2 Main Fea- tures and Tax Implications of the Constitution of Each Type of Entity ). Belgian withholding tax on dividend distributions Dividends are in principle subject to a 30% Bel - gian withholding tax, unless an exemption or reduction applies (based on domestic law or a double tax treaty). In case of a dividend distributed by ordinary SPV, a Belgian domestic dividend withholding tax may be available for, eg, qualifying partici - pations (at least 10% in the capital) subject to conditions. In case of a dividend distributed by SREIF/B- REIT, a Belgian domestic dividend withholding tax is available (subject to an attestation require - ment) provided that the dividends are not derived
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