The Irish and the Belgians have a long and remarkable history which stretches back from centuries old. To date, Belgium is Ireland’s third largest export market. One of the major reasons behind the two countries’ flourishing relationship is the Ireland-Belgium double taxation convention. The signing of this agreement has allowed Irish and Belgian residents to conduct business activities in the two countries without facing fiscal evasion or double taxation.
DTAs, popularly known as Double Tax Treaties are agreements made between two countries in order to present clear guidelines on how income flowing between the two nations should be taxed.
Irish Tax Regime
- The income tax
Income tax is charged on the gross income earned by an entity from its business activities within Ireland
- The corporation tax
Businesses resident in Ireland will be taxed on trading profits they receive from their activities.
Belgium Tax Regime
- individual income tax
Income tax is charged on the gross income earned by an entity from its business activities within Belgium
- corporate income tax
Businesses resident in Belgium will be taxed on trading profits they receive from their activities.
- income tax on non-residents
Individuals who are non-residents in Belgium are only accountable for paying tax from their Belgian source of income, this can be income from a job in Belgium, real estate or movable income.
- prepayments and additional prepayments
- income tax on legal entities
- the surcharges (centimes additional) on any of the taxes mentioned above including the communal supplement to the
individual income tax (hereinafter referred to as "Belgian tax")
It is also very important to note that even if the above tax criteria change, the convention will still hold. Nonetheless, each year the representatives of the two countries will notify each other in regards to any changes which might have occurred in their respective taxation regulations.
Important Information to note
- A company can only be considered as an Irish resident if its business operations are conducted and managed in the Irish territory.
- An entity or business shall only be considered a Belgian resident, provided that it’s influential management is located in the Belgian territory.
- If a company is conducting business activities in either Ireland or Belgium through an agent of independent statuses such as a broker or commission agent—it does not automatically become a permanent establishment in the state in which it is operating. The same applies to an entity which is controlled or controls a resident of either the two countries—it does not automatically become a permanent establishment in the state where it is controlling or in the state from which it is controlled.
- Any income acquired from immovable property should be taxed in the country in which the property is located.
- The profits of an Irish or Belgium business are only taxable in the respective countries unless the business conducts business operations either of the two countries through a permanent establishment situated therein. The tax charged in the country where the permanent establishment is located should only be limited the profits acquired from the establishment.
The Irish-Belgium Double tax agreement offers many opportunities for investors from these two countries. To learn more about the provisions of this treaty, contact our expert consultants at SIGTAX. We have all the answers to your questions and we can help to make your company formation process easier than you could ever anticipate.