What is Notional Interest Deduction (Belgium)?
The Notional Interest Deduction (NID) lets a Belgian company deduct a fictional interest charge calculated on the increase in its equity. The rate is set each year from 10-year Belgian government bond yields.
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Current Rate (Rate set annually)
Approximately 0.2% to 0.4% for 2026, with SMEs receiving a 0.5% premium on top of the base rate
Example
A company that keeps profit in the business raises its equity. The NID applies a small fictional interest rate to that increase and deducts the result from taxable profit, which lowers the tax bill slightly.
How Notional Interest Deduction (Belgium) works in Belgium
The NID is an incentive to fund a company with equity instead of debt. It is worked out on the incremental increase in risk capital, not on the whole balance. The rate follows 10-year Belgian government bond yields and is published each year.
Bond yields have been low in recent years, so the benefit is smaller than it used to be. It still gives modest savings on retained earnings and can reduce the effective tax rate. Finn calculates the deduction when equity increases year on year. The exact rate for your year should be confirmed on finance.belgium.be.
Related terms
Corporate Income Tax (impôt des sociétés / vennootschapsbelasting) is the tax Belgian companies pay on their taxable profit. The standard rate is 25%, in force since 2020. Qualifying small companies pay a reduced 20% rate on the first €100,000 of profit.
The SME reduced rate taxes the first €100,000 of profit at 20% instead of 25% for qualifying small companies. The maximum saving is €5,000 a year. From tax year 2026, a director must receive at least €50,000 gross annual remuneration.
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