Belgium: Draft legislation with a proposed amendment to the Belgian thin capitalisation rule for certain financing activities

Tax Insights ()

New enacted Belgian thin cap rule

The Program Act of 29 March 2012 introduced a general thin capitalisation ('thin cap') rule into Belgian tax legislation. The new 5:1 debt/equity ratio is applicable to (i) loans whereby the beneficial owner is not subject to income taxes, or, with regard to interest income, is subject to a tax regime which is substantially more advantageous than the Belgian tax regime; and (ii) intra-group loans. For more information regarding the new thin cap regulation as adopted by the Program Act of 29 March 2012, please refer to our PKN publication of March 27, 2012 ("New draft legislation on Belgian thin cap rules has been published and potential changes have been announced").