As a part of the implementation of the EU Anti-Tax Avoidance Directive, the government has introduced new controlled foreign company (CFC) rules from 2019 that provide for the inclusion of non-distributed income of CFCs arising from non-genuine arrangements or a series of arrangements put in place for the main purpose of obtaining a tax advantage. The new rules will apply if a Belgian resident holds, directly or indirectly, more than 50% of the shares or voting capital of the CFC, and the CFC is subject to corporate income tax at a rate less than 50% of the Belgian corporate income tax rate. Double taxation relief provisions are applicable in respect of dividends received from CFCs as well as capital gains arising from the alienation of shares in a CFC.
The CFC rules are applicable to subsidiaries as well as foreign permanent establishments in line with the EU Anti-Tax Avoidance Directive.
For tax periods closing on or after 31 December 2020, the CFC rules will apply to foreign entities established in jurisdictions specified in the EU list of non-cooperative jurisdictions (see Sec. 13.5.), regardless of meeting control or subject to tax tests as mentioned above.