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Belgium: Notional interest deduction for assessment year 2021

Belgium: Notional interest deduction for AY 2021

The notional interest deduction rate for assessment year 2021 is expected to be 0% for large companies.


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This rate is subject to official confirmation.  


Following the corporate tax reform, the notional interest deduction has become less attractive as the calculation is now based on the positive increase of the equity of the company (i.e., incremental notional interest deduction). However, the same method is still used for the calculation of the notional interest deduction rate.

For an assessment year (AY), the rate is calculated on the average return of the 10-year Belgian government bond in the months of July, August, and September of the penultimate year preceding the assessment year (e.g., for AY 2021, this would be July, August, and September 2019).

The average return for those months in 2019 is -0.092%. Because the notional interest deduction constitutes a deduction, the notional interest deduction rate for AY 2021 would be 0% for large companies.

The rate is increased by 0.5% for small and medium-sized enterprises (SMEs), resulting in an expected rate of 0.408% for SMEs. These rates are subject to official confirmation.

As a reminder, the notional interest deduction rate for assessment year 2020 is 0.726% (1.226% for SMEs).

Read a September 2019 report prepared by the KPMG member firm in Belgium

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