On January 21, the Belgian government voted a new amendment to the “VVPRbis” regime.
The regime allows small companies, incorporated as from 1 July 2013, to distribute a dividend at a preferential withholding tax rate of 20% (as from the second accounting year) or 15% (as from the third accounting year).
One of the conditions of this regime is that, on the day of the distribution of the dividend, the subscribed capital is fully paid up. Companies without minimum capital were (previously) excluded from the regime. It was assumed that the shareholder(s) had paid up the entirety of the subscribed capital. Therefore, although from a corporate law point of view, the capital of a limited liability company only had to be paid up to up the amount of 6.200 or 12.400 EUR, depending on whether there were one or two shareholders in the company; from a tax point of view, the capital had to be fully paid up, with a minimum of 18,600 euro, at the time of the payment of the dividend.
The entry into force of the CSA, had changed the deal for the SPRL (now transformed into SRL). Since 1st May 2019, SRL are no longer required to have a minimum capital. At the same time, the provision excluding companies without minimum capital from the “VVPRbis” regime was removed.
Some SPRL – whose capital had not yet been fully paid up and which were being transformed into a SRL – therefore proceeded to a reduction of their equity capital by cancelling the payment of subscribed but not paid-up capital in order to be able to benefit from the reduced withholding tax rate on distributed dividends without having to receive additional funds from their shareholders.
Unfortunately, the legislator intervened. As a result of this new legislative amendment, the contribution initially subscribed must be fully paid up to the amount historically subscribed in order to benefit from the “VVPRbis” regime. Companies that have reduced their capital by waiving the payment of the contribution are therefore excluded from the “VVPRbis” regime.
However, a transitional regime was put in place for companies having performed a capital reduction between 1st May 2019 and 15th December 2021. These companies will be able to proceed, before 31st December 2022, to a capital increase, which will have the effect of increasing the amount of paid-up capital up to the amount initially subscribed before the waiving of payment.
These measures will apply to dividends distributed as of January 2022.
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