Participation exemption for dividends received by parent companies: 100% exempt

In the framework of the expected corporate income tax reform (further to the agreement reached at government level last summer), the Belgian government intends increasing the participation exemption (dividend received deduction), which under current legislation is limited to 95% of the dividend income received, to a 100%-deduction. As a result, dividends received by a Belgian (parent) company from its subsidiaries would qualify for a full exemption. This measure should increase Belgium’s attractiveness as a holding jurisdiction.