Following the corporate tax reform, the regime of the notional interest deduction was adapted. As from assessment year 2019, the deduction is calculated on the increase of equity over a period of 5 years, and more specifically, on the difference between the corrected equity at the beginning of taxable period X and the corrected equity at the beginning of taxable period X-5 (“incremental” notional interest deduction). Any changes during the taxable period to the equity (and to its corrections) must no longer be taken into account.
However, the new regime of the “incremental” notional interest deduction still uses the same calculation method to define the interest rate that must be used.
The notional interest deduction rate for an assessment year (e.g. 2020) is calculated on the average return of the 10-year OLO in the months July, August and September of the penultimate year preceding the assessment year (e.g. 2018).
The average return for those months in 2018 is 0,726% meaning that the NID rate for AY 2020 will be 0,726% (1,226% for SMEs) (subject to official confirmation).
As a reminder, the NID rate for assessment year 2019 is 0,746 % (1,246 for SMEs) (officially confirmed in the Belgian Official Gazette of 5 September 2018).