Small Business Tax in Belgium

What corporate income tax rates apply to Belgian companies?

Belgium levies corporate income tax (vennootschapsbelasting / impot des societes) on the worldwide taxable profits of resident companies. The standard rate is 25%. A reduced rate of 20% applies to the first EUR 100,000 of taxable profit for companies that qualify as a small company (kleine vennootschap / petite societe) under Article 1:24 of the Code of Companies and Associations (CSA/WVV). To satisfy that size test, a company must not exceed more than one of three thresholds: average annual workforce of 50 full-time equivalents, annual turnover (excluding VAT) of EUR 11,250,000, or total balance sheet of EUR 6,000,000. These revised thresholds took effect for financial years starting after 31 December 2023 (FPS Finance, corporate income tax rates).

Beyond the size test, the reduced rate requires at least one company director to receive annual gross remuneration of at least EUR 50,000 (the threshold rose from EUR 45,000 for assessment year 2026 onwards and is subject to annual indexation). Benefits in kind included in that package may not exceed 20% of total remuneration. An exception applies when the director's remuneration equals or exceeds the company's own taxable profit, in which case the remuneration condition is deemed fulfilled even below EUR 50,000 (Andersen Belgium, director remuneration 2026). The practical saving from the reduced rate is EUR 5,000 per year on the first EUR 100,000 bracket.

For assessment year 2026 the advance-payment surcharge is 6.75% (see the advance-payment section below). There is no communal surcharge on corporate income tax; that variable applies only to personal income tax (FPS Finance, advance payments).

How are sole traders and freelancers taxed in Belgium?

Sole traders and natural persons carrying on a profession in their own name are not subject to corporate income tax. Their business profits are included in personal income tax (personenbelasting / impot des personnes physiques) alongside other income categories such as wages and investment income. For income year 2025 (assessment year 2026) the federal tax bands are (FPS Finance, tax rates):

All taxpayers are entitled to a basic tax-free allowance of EUR 10,910, which generates a tax reduction calculated at the 25% rate. On top of the federal tax, every municipality levies a communal surcharge (gemeentelijke opcentiemen / centimes additionnels communaux) on the calculated federal tax. Rates range from 0% to 9% depending on the municipality; the national average is approximately 7%, raising the effective top marginal rate to roughly 53.5%. Social-security contributions paid by the self-employed are deductible from the taxable income base, partially reducing these rates in practice (PwC Belgium, personal income tax).

What social-security contributions must self-employed persons pay?

Self-employed persons and company directors active as their main occupation must affiliate with a social-insurance fund (sociaal verzekeringsfonds / caisse d'assurances sociales) and pay quarterly provisional contributions. The contribution structure for a main-occupation self-employed person in 2026 is (Accountable, social-security contributions):

• On net professional income up to EUR 17,374.08: a flat minimum of EUR 890.42 per quarter (plus fund administrative fees of 3-4%).
• On net professional income between EUR 17,374.08 and EUR 75,024.54: 20.5% of net income.
• On net professional income between EUR 75,024.54 and EUR 110,562.42: 14.16% on this slice.
• Above EUR 110,562.42: no further contributions are due.
• The maximum quarterly contribution is EUR 5,103.05.

Contributions in the first three years are provisional, based on estimated income or the minimum floor, and are recalculated retroactively once the tax authorities confirm actual net income. Social-security contributions reduce the taxable base for personal income tax purposes. Self-employed persons in a complementary occupation pay contributions only above a threshold of EUR 1,922.16 of annual freelance income, with no quarterly minimum (NISSE/INASTI, social statute of the self-employed).

When must a Belgian business register for VAT?

Belgium imposes value-added tax (belasting over de toegevoegde waarde / taxe sur la valeur ajoutee, BTW/TVA) at a standard rate of 21%, with reduced rates of 12%, 6%, and 0% for specified categories of goods and services. All businesses supplying taxable goods or services in Belgium must register for VAT and file periodic returns unless they qualify for the small-business franchise exemption.

The franchise exemption under Article 56bis of the Belgian VAT Code applies to businesses whose annual turnover (excluding VAT) does not exceed EUR 25,000. Exempt businesses do not charge VAT to customers and do not file periodic VAT returns, but they also cannot deduct VAT paid on purchases. If turnover exceeds EUR 25,000 by no more than 10% (that is, up to EUR 27,500) during the current calendar year, the exemption can still be applied for that year but expires on 1 January of the following year. Exceeding EUR 27,500 terminates the exemption immediately. The Belgian federal government approved an increase of the ceiling to EUR 30,000 in April 2026, but that change requires a formal legislative amendment to Article 56bis and publication in the Official Gazette; the EUR 25,000 threshold remains operative until those steps are completed (FPS Finance, VAT exemption scheme for small businesses) (VATupdate, threshold status June 2026).

Certain sectors are excluded from the franchise scheme regardless of turnover: VAT units, construction-work businesses, businesses required to use a certified cash-register system, and suppliers of certain waste materials.

How does the notional interest deduction still work for small companies?

The notional interest deduction (aftrek voor risicokapitaal / deduction pour capital a risque) was substantially restricted by the 2017 corporate-tax reform and, since financial year 2018, applies only to incremental equity rather than total qualifying equity. The deduction equals a percentage of the positive difference between the company's equity at the start of the current taxable period and the average equity over the preceding five taxable periods (the one-fifth increment). The rate is linked to the yield on 10-year Belgian government bonds and is set annually; for tax year 2024 the rate was 1.443% for SMEs and 0.943% for large companies. The incremental-NID reduces the corporate taxable base in the year it is taken; any unused deduction can be carried forward subject to the general minimum-tax-base rules. While far less impactful than the pre-2018 regime, the deduction remains useful for fast-growing small companies that retain profits and build equity year on year. Verify the current applicable rate with FPS Finance before filing, or consult a qualified tax professional (FPS Finance, notional interest deduction) (PwC Belgium, corporate tax credits).

What is the advance-payment regime and why does it matter?

Belgian companies and self-employed persons are expected to pay their corporate or personal income tax liability in four quarterly instalments (voorafbetalingen / versements anticipes) rather than in a single lump sum after the tax year closes. Failure to make sufficient advance payments triggers a non-deductible surcharge: for assessment year 2026 and assessment year 2027 the surcharge rate is 6.75%. Because the surcharge applies to the tax that should have been prepaid, it can add meaningfully to a company's effective tax cost.

Companies that make timely advance payments receive a tax-credit offset against the surcharge. Payment deadlines for income year 2026 and the corresponding credit percentages are: 10 April 2026 (9.00%), 10 July 2026 (7.50%), 12 October 2026 (6.00%), 21 December 2026 (4.50%). Paying 75% of estimated annual tax before 10 April eliminates the surcharge entirely on that portion. Newly incorporated small companies are exempt from advance-payment obligations during their first three financial years, which provides a useful cash-flow advantage at start-up (FPS Finance, advance payments) (Moore Belgium, advance payments 2026).

For self-employed sole traders, advance payments also offset the 6.75% surcharge on personal income tax. Because sole-trader income often fluctuates, the provisional nature of early payments means estimates should be reviewed and adjusted by the October and December deadlines.

The tax landscape for Belgian small businesses is detailed and subject to annual parameter changes. For matters such as determining whether your company meets the Article 1:24 size test, calculating the director-remuneration package that qualifies for the reduced 20% rate, or optimising advance-payment timing, work with a qualified tax professional who can apply the current rules to your specific structure. For a broader country overview see the Belgium country overview.