On 27 December 2019, a royal decree of 20 December 2019 published in Belgian official journal introduces several changes to the interest deduction limitation rule in the Income Tax Code, often referred to as the 30% earnings before interest, tax, depreciation and amortization (EBITDA) rule. The amendments apply as from tax year 2020, i.e., for financial years commencing on or after 1 January 2019.
Belgium implemented interest deduction limitation rules in accordance with the EU anti-tax avoidance directive (ATAD 1) as from tax year 2020. The limit on the deduction of arm’s length excess borrowing costs is the highest of 30% of the taxpayer’s EBITDA or EUR 3 million.
