Corporate tax: how do you file a correct return?

In brief

Every company pays corporate tax. It works out the amount in its corporate tax return, filed once a year on Biztax. The form starts from the accounting result, adds certain expenses and subtracts deductions. Careful preparation avoids corrections and surcharges.

Who files a corporate tax return?

Every company resident in Belgium files one each year. That applies to an SRL, an SA or an SC, even without profit. A loss-making company therefore also completes the form. Corporate tax reaches its worldwide profits, whatever their origin.

Non-profit associations normally fall under a separate levy on legal entities.

The rates

The standard rate stands at 25%. Small companies may benefit from a reduced rate of 20%. It applies to their first 100,000 euros of taxable profit. Three main conditions apply.

• The company meets the small company criteria of the Code of Companies and Associations.
• It pays at least one director a salary of at least 45,000 euros, or equal to taxable profit if that figure is lower.
• It does not fall under the exclusions, which notably target investment companies.

On 100,000 euros of profit, the gap between the two rates comes to 5,000 euros. Check the salary condition before the year end. The reduced rate strongly changes your corporate tax bill.

From accounting result to taxable profit

Your corporate tax return does not simply copy the accounting profit. It follows a three-step path.

Disallowed expenses

Some costs remain partly or fully non-deductible.

• Restaurant costs, deductible at 69%.
• Business gifts, deductible at 50%.
• Fines and corporate tax itself.
• Part of car costs, depending on the engine type and order date.

Deductions

• The dividends received deduction removes double taxation on dividends, subject to holding and duration conditions.
• The innovation income deduction covers 85% of certain income from patents and protected software.
• The risk capital deduction rewards stronger equity.
• The investment deduction targets certain assets, at rates the legislator revises regularly.
• Past losses carry forward without time limit, with a cap above one million euros of profit.

Worked example

Take a service SRL with an accounting profit of 80,000 euros. Non-deductible restaurant costs and other disallowed expenses add 5,000 euros. Taxable profit reaches 85,000 euros. If the company meets the reduced rate conditions, corporate tax comes to 17,000 euros. At the standard rate, it would reach 21,250 euros. That is what your corporate tax return really puts at stake.

Filing your corporate tax return on Biztax

Filing happens only online, through the Biztax application of the FPS Finance. The form covers the annual accounts, add-backs, deductions and the final calculation. Some deductions require specific appendices, such as form 275 C for risk capital or form 275 U for investments.

Your accountant usually files for you under a mandate. Still, check the key amounts before sending.

Filing deadlines

The FPS Finance sets the corporate tax deadline every year. It depends on the closing date of the financial year. A professional agent often gets a longer period. Check the calendar on the FPS Finance website from spring onwards.

Advance payments

In principle, a company pays its corporate tax during the year. Without sufficient advance payments, a surcharge applies. For a calendar financial year, remember these four due dates.

• 10 April.
• 10 July.
• 10 October.
• 20 December.

Early payments weigh more heavily in the calculation. A small company escapes this surcharge during its first three financial years. Make the most of it, but prepare cash for the fourth year already. These payments then count towards your corporate tax bill.

After filing

The FPS Finance then sends an assessment notice. You pay the amount within two months of that notice. The administration may also ask questions or propose an adjustment. Reply within the stated period and keep your records at hand.

Common corporate tax mistakes

• Forgetting the salary condition for the reduced rate.
• Deducting restaurant or car costs in full.
• Leaving out the appendix for a claimed deduction.
• Underestimating advance payments and suffering the surcharge.
• Filing after the deadline, which exposes the company to an ex officio assessment and surcharges.

In short

Your corporate tax return turns the accounting result into taxable profit. Check the reduced rate conditions, document each deduction and plan your advance payments. To make the most of existing schemes, read our guide to the benefits available to SMEs. To delegate, see how to find a Belgian accountant.