The 'Basket-rule': return to 70% as of the 2025 tax year!

For several years now, certain corporate tax deductions (e.g. tax losses carried-forward, DRD carried-forward) have been limited by the so-called “basket” rule. According to this rule, and until tax year 2023, the deductions within the “basket” could only be claimed up to an amount of 70% of the taxable profits (remaining after the deduction of intra-group transfers) exceeding EUR 1 million.

In other words, 30% of the taxable profits exceeding this EUR 1 million threshold constituted a minimum taxable base. This article examines the implications of these changes on corporate taxation in Belgium for the upcoming tax years.

The 70% rate reduced to 40%

With the adoption of the Program Law of 26 December 2022, the 70% rate was reduced to 40%, resulting in a minimum taxable base of 60%. However, the same law also provides that the 70% rate would be reinstated if the Council's proposal for a directive (COM/2021/823) on ensuring a global minimum level of taxation for multinational groups in the Union (also known as “pillar 2”) were to be transposed.

As the Law of 19 December 2023 transposed the pillar 2 directive into Belgian law, the previous 70%-“basket” ceiling is reinstated as of 1 January 2024 (applicable from tax year 2025 linked to a taxable period starting on or after 1 January 2024).

Minister of Finance’s Notice

As anticipated, this was confirmed by a notice from the Minister of Finance, published in the Official Gazette on 28 December 2023.

In case of questions, please do not hesitate to reach out to your regular contact within the Fieldfisher Belgium tax team.