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Jun 16th
Home arrow Companies

Taxable income

Companies formed in Belgium, as well as companies that have their principal place of business or place of management in Belgium and that are engaged in commercial activities, are taxed on their worldwide income.

Generally speaking, the taxable income of a resident company is the difference between the company's net value at the beginning of the fiscal year and its net value at the end. 

A company's taxable income is computed on the basis of its worldwide profit (or loss) reflected in the annual accounts. Taxable profits are determined in accordance with the provisions of the accounting law unless the tax law explicitly deviates from them

The taxable income of a company is its worldwide income less the deductions that are allowed.

Each year the company's management prepares an inventory of assets and annual accounts. The accounts include a balance sheet, a profit and loss account, and an explanatory memorandum. These documents must be drawn up in accordance with the Companies Code, the accounting law and the various royal decrees implementing these rules, as well as the generally accepted accounting principles as codified by the Belgian Accounting Standards Commission. The annual accounts are submitted to the general meeting of shareholders or members for approval.

Although company groups are required to file consolidated accounts in compliance with the accounting rules, Belgium does not have a system of consolidated accounts for income tax purposes. Interestingly, a form of consolidation is available under the value added tax law.


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