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3.1. Corporate Tax Residence

According to Art. 2(5)(b) ITC, a legal entity is a resident of Belgium if it has its registered office, its principal establishment or its seat of management or administration in Belgium. If a company is a Belgian resident, it is subject to corporate income tax on its worldwide income. (Art. 179 ITC)

Belgium has introduced a new code of Companies and Associations and Miscellaneous Provisions which will be effective from 1 May 2019. Under these provisions, the application of the statutory seat doctrine replaces the real seat doctrine (i.e., a company is considered Belgian if incorporated or formally established in Belgium instead of being based on where the company is effectively managed i.e. its real or effective head office).

Accordingly, for tax purposes, the real seat doctrine continues to apply with an introduction of a new legal presumption that if a company has its registered office in Belgium (i.e. incorporated/established in Belgium), it is deemed to have its place of effective management in Belgium. To prove otherwise, the taxpayer will need to demonstrate that the tax residence of the company is established in another state in accordance with the tax law of that state.

Companies, associations, establishments and organizations, whether legal entities or not, which have a legal form comparable to Belgian entities and which do not have any of the above connecting factors in Belgium, are subject to the income tax on non-residents (Art. 2(5)(c) and Art. 227(2) ITC).