What is SME Reduced Rate (Belgium)?
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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Current Rate (Tax year 2026 onwards uses the €50,000 condition)
20% on the first €100,000 of taxable profit, 25% above. Minimum director remuneration €50,000 from tax year 2026 (€45,000 before).
Example
A qualifying company with €150,000 of taxable profit pays 20% on €100,000 (€20,000) and 25% on €50,000 (€12,500), so €32,500 in total. At a flat 25% it would pay €37,500, a difference of €5,000.
How SME Reduced Rate (Belgium) works in Belgium
The reduced rate is not automatic. The company must meet every condition together. It must be a small company under the Companies and Associations Code. At least one director must receive minimum gross annual remuneration, which is €50,000 from tax year 2026 and was €45,000 before. Benefits in kind cannot exceed 20% of that director's total remuneration package. Further shareholding and distribution conditions apply under articles 215 and following of the Income Tax Code 1992.
A company that fails any one condition is taxed at 25% on all of its profit. Because the director pay condition changed for 2026, owner-managers who paid themselves less than €50,000 should check their position before the year closes.
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 SRL (société à responsabilité limitée) or BV (besloten vennootschap) is the private limited company, and the default form for Belgian SMEs. Since the 2019 Companies and Associations Code it has no minimum share capital.
The ONSS (Office National de Sécurité Sociale) or RSZ (Rijksdienst voor Sociale Zekerheid) is the National Social Security Office. It collects employee and employer social security contributions in Belgium every quarter.
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