Belgium will exempt non-resident companies from withholding income tax derived from the lease or rental of tangible movable property, effective 1 November 2025; the standard 30% withholding tax previously applied.
Belgium’s Federal Public Service (SPF) Finance published a Royal Decree on 31 October 2025, which eliminates the withholding tax on payments for renting or leasing tangible movable property, effective from 1 November 2025.
Previously, Belgian companies paying a foreign entity for the use of assets, such as construction equipment or vehicles, were required to withhold 30% of the payment for tax purposes. This often led to a “gross-up,” increasing the total cost for the Belgian business by as much as 43%.
While many of Belgium’s international tax treaties already offered an exemption, navigating them involved complex administrative processes that could cause delays and uncertainty. The new Royal Decree simplifies this by introducing a broad exemption.
How to qualify for the exemption
The exemption applies to payments made by a Belgian resident company for its business activities to a beneficiary located abroad.
The key requirements are:
- The transaction must be genuine and serve a valid commercial purpose that reflects economic reality.
- The exemption is not available if the Belgian company and the foreign beneficiary are directly or indirectly related, and the beneficiary enjoys a highly favourable tax status in its home country. However, an exception exists if the beneficiary’s effective tax rate is at least half of what it would be if they were based in Belgium.
Claiming the exemption
To claim the waiver, the Belgian company needs to prepare a certificate that includes:
- Full identity details of both the payer and the recipient.
- A clear description of the leased property.
- Confirmation that the payment is part of a genuine business transaction.
- The bank account details of the foreign beneficiary.
This certificate must be kept up to date and renewed if any of the information changes.
