1. Selling Establishments

Local Establishments selling in National Markets

In principle, a foreign establishment in Belgium has to keep separate accounts of its Belgian operations. If the results shown by these accounts are accepted, assessment is on this basis, but, if not, recourse will be had to one of the methods referred to under “General Questions and Methods of Apportionment”.1


The profit from sales may be determined (in Belgian francs) by deducting from the sale price: (a) the value of the goods at the time they were consigned to Belgium; (b) the cost of transport to Belgium including insurance and import duties; (c) costs of handling, storage, warehousing or packing in Belgium prior to sale; (d) other general expenses in Belgium in connection with these operations.

In principle, the production of the original sales invoices allows the fiscal agent to satisfy himself that these prices are normal having regard to the prices of the same goods produced in Belgium. In the case of special articles without any known current price, the Controller may refuse to accept the accounts if he has reason to doubt their accuracy; in this case assessment will be on an empirical basis.

Local Establishments selling abroad

Profits derived from sales to customers abroad are all ascribed to the branch in Belgium, when the sales were effected through that branch. The law does not prescribe what part the Belgian establishment must play in order that it may be regarded as the agent of sale. In practice, all operations are ascribed to the branch which are concluded by it with the third State, even if they required the authorisation of the real centre of management.

2 and 3. Manufacturing and Processing Establishments

No legal provision ascribes to a manufacturing establishment a given part of profits from the sale abroad of goods manufactured in the country. The revenue authorities have to examine in each case whether and to what extent the manufacturing establishment is to be regarded as having earned profits in Belgium.

4. Buying Establishments2


In principle, a permanent establishment situated in Belgium has to keep separate accounts of all operations conducted in the country, including purchases made on behalf of the principal enterprise. Assessment is based either on these accounts or on one of the methods already mentioned.

The foreign enterprise is not taxable if purchases are made from a local subsidiary, which, being regarded as an independent company, is taxed on the whole of its profits.

5. Research or Statistical Establishments, Display Rooms, etc

Profits could be ascribed to establishments of this kind in Belgium, on the principle that a foreign enterprise is taxable if it has an establishment in Belgium. The revenue authorities have decided that a foreign company wishing to establish an office for supervision and control in Belgium shall be deemed to have an establishment there. If, however, the separate accounts show no profits and, on being produced, are accepted as being in order, no tax is levied.


No special method of assessment is used for these institutions. Their income is determined either on the basis of their separate accounts, if approved, or empirically; the latter method prescribes for these enterprises a minimum taxable profit of 15,000 francs per employee, taking the average number of employees for the year in question.

The revenue authorities are not aware of any case in which the comparative method has had to be used.


In principle, profits are determined from the separate accounts. It may be remembered (see page 60) that these accounts are not required to show profits separately according to the class of contract (life insurance, temporary, mixed, etc.), but only according to the branch of insurance (life, fire). On the other hand, the separate accounts must include: the gross premiums (see note 3 on page 60) collected by the Belgian agencies without deducting premiums surrendered to reinsurance companies; the reserves corresponding to policies concluded by these agencies or contracted in Belgium by agents domiciled abroad; interest on these premiums and reserves; compensation paid by the Belgian agencies; the latters’ general expenses; and, lastly, reinsurance operations relating to policies concluded by the Belgian agents or contracted in Belgium by agents domiciled abroad, etc.

For purposes of uniformity, the Administration has prescribed the production of a standard profit-and-loss account containing all the information required.

In the absence of properly kept accounts, or if such are not produced, the empirical method is employed, with the following minimum profits:

Life insurance: 20 francs per 1,000 francs of paid premiums;

Maritime insurance: 25 francs per 1,000 francs of paid premiums;

Other insurance: 60 francs per 1,000 francs of paid premiums;

The comparative method has not as yet had to be applied.


Same as for (b). Under the empirical method, however, the minimum taxable profit is 150 francs per 1,000 francs of receipts, but not less than 10,000 francs per employee and workman; in the case of railways, the minimum is 3,000 francs per employee and workman (average number for year in question).

The Government is authorised to conclude international agreements granting, subject to reciprocity, complete fiscal exemption to the income of foreign shipping enterprises domiciled in Belgium. Agreements of the kind have been concluded with Norway, Denmark and Iceland, Finland, Ecuador, Sweden and France, and negotiations are proceeding with other countries.


Same as for (b); if the empirical method is used, the minimum profit is 150 per 1,000 francs of receipts, but the taxable income must be not less than 10,000 francs per workman and employee.


In Belgium, telegraphs and telephones are operated by a Government monopoly, which is not taxable.


Same as for (b); the empirical method assumes a minimum profit of 3,000 francs per employee and workman (average number for year in question).


Same as for (b); the empirical method presupposes a minimum profit of 150 francs per 1,000 francs of receipts, with a minimum taxable income of 10,000 francs per workman and employee.