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Transfer of ownership of the leased property
• Even if the lease contract states that the buyer (new lessor)
is entitled to remove/evict the lessee after it acquires the
leased property, the buyer (new lessor) may do so only if
certain circumstances, deadlines, and procedure (as set
out in the CLA) are complied with. The buyer must in any
of these circumstances give a one-year prior notice to the
lessee within three months from the acquisition, stating
clearly the reason justifying the termination of the lease and,
as the case may be, pay an indemnity payment (“indemnité
d’éviction”/“vergoeding wegens uitzetting”) to the lessee.
TAX
Direct acquisition of a property
• The acquisition of a property will give rise to registration
duties (“droits d’enregistrement”/“registratierechten”) and/or
value added tax (VAT).
• Registration duties are largely regional taxes. The Flemish-,
Walloon-, and Brussels Capital Regions all levy tax on the
transfer for consideration of immovable property in their
territory. The rate is 10% in the Flemish Region and 12.5% in
the Walloon – and Brussels Capital Regions. It is applied to
the agreed sale price to be increased by related charges (such
as land surveying or soil decontamination costs, but not legal
or notary fees). The rates will be substantially reduced (to
4% in the Flemish Region, 8% in the Brussels Capital Region,
and 5% in the Walloon Region) if the property is sold to a
professional reseller of immovable property.
• However, the sale of new buildings and the land they are built
on is subject to VAT (and exempt from registration duties) if
the seller is either a professional reseller (for VAT purposes)
or any other person who opts to subject the sale to VAT. A
building is considered new until 31st December of the second
year following the year of its first occupation. The VAT rate
is 21% (but for some cases, a reduced rate of 6% or 12%
may apply). The taxable amount is the purchase price or
the normal market value, whichever is higher. A sale that is
subject to VAT is exempt from the proportional registration
duties (of 10% or 12.5%), but it will be registered at a fixed
registration duty of 50 EUR.
Acquisition of shares in a company holding a property
• Acquiring a company’s shares will not give rise to registration
duties or VAT. In principle the seller will not have to pay
capital gains tax. Subject to certain conditions, capital gains
on shares are exempt unless the seller is a large company,
in which case the rate will be 0.412%. Under certain
circumstances, the tax administration could consider the sale
of shares to constitute an abusive practice, in which case the
sale could be treated as a sale of the underlying real estate.
Special tax aspects
• Real Estate Investment Trusts (“SICAF Immobilière/
VastgoedBEVAK”) and Regulated Real Estate Companies
(“Société immobilière réglementée/ Gereglementeerde
vastgoedvennootschap”) that meet all the relevant conditions
are formally subject to the Belgian corporate income tax
regime, but they are taxed only on a limited tax base not
including business profits. The tax base is limited to abnormal
or gratuitous advantages received as well as disallowed
expenses. The withholding tax on dividends distributed by
a Belgian REIT or Regulated Real Estate Companies is 25%,
which can be reduced to 15% if 80% of the held real estate
consists of qualifying residential real estate. Dividends
received from a Belgian REIT or Regulated Real Estate
Companies will never qualify for the participation exemption
regime and are, consequently, added to the taxable base of
the receiving company.
• According to Belgian thin capitalization rules, interest
payments on loans will not be tax deductible to the extent
that they exceed a debt/equity ratio of 5:1, and the recipient
of the interests is either a company of the same group or a
company that is either not subject to income tax or in the
hands of which the interest received benefits from a tax
regime that is substantially more beneficial than the one
applicable in Belgium. Interest costs will also not be tax
deductible if they are not at arm’s length.
• The notional interest deduction is a Belgian tax incentive that
grants taxpayers a deduction of a fictitious interest expense
on the corrected net equity of the company. However, Belgian
REITS and Regulated Real Estate Companies, as described
above, are not eligible for the regime. The notional interest
rate for 2015 is set at 2.630% for large companies and at
3.130% for small and medium-sized enterprises. The regime
offers substantial tax planning opportunities.
18 Investors Guide to Europe 2015