The tax shelter is a tax credit (a reduction of the investor’s Belgian personal income tax) for investors that amounts to either 45% of the invested amount, in case of an equity investment in a qualifying ‘micro-company’, or 30% in case of an investment in a ‘SME’.
Since February 2017, investments via approved crowdfunding platforms will also be considered for the tax shelter benefit.
In 2015, Alexander De Croo launched the tax shelter for start-ups that provides a tax benefit for people who invest in start-ups. The tax reduction can be an amount up to 30 percent of the invested amount, or even up to 45 percent if it regards a micro-enterprise.
In order to be able to take advantage of the full tax benefit, the investor must hold onto the investment (shares) at least four years. Since 2017, investments via approved crowdfunding platforms are also be considered for the tax benefit.
The new legal framework specifies the conditions that must be satisfied in order for a crowdfunding platform to be approved. The conditions and procedure are located on the website of the FSMA (Authority for Financial Services and Markets), which is responsible for the approval. Only investments via approved crowdfunding platforms are considered for the tax benefit.
Capital rounds up to 300,000 Euros whereby an individual investor can subscribe to a maximum of 5,000 Euros (previously 1,000 Euros) are exempt from the prospectus obligation.
The Belgian Federal Public Service Finance
For the purpose of this rule, a ‘start-up’ is defined as:
- A company that has been incorporated for less than 4 years at the time of the equity investment;
- A self-employed individual who has been registered for less than 4 years at the time of the equity investment;
This tax credit amounts to 45% of the invested amount for investments in micro-companies or 30% for investments in SME's.
A qualifying ‘SME’ is a company with an average annual headcount of no more than 100 employees which meets at least two of the following three criteria on a consolidated basis:
- A balance-sheet total of maximum EUR 3.650.000;
- Turnover, excluding VAT, of maximum EUR 7.300.000;
- Average annual employee headcount of maximum 50.
A ‘micro-company’ is a company that meets at least two of the following three criteria on a stand-alone basis:
- A balance-sheet total of maximum EUR 350.000;
- A turnover, excluding VAT, of maximum EUR 700.000;
- Average annual employee headcount of no more than 10.
Since only start-up businesses are involved, the Belgian tax authorities allow to make a best-effort estimate of the above-mentioned criteria as long as no final figures are available when running these tests.
The Belgian tax shelter for start-ups was introduced in 2015. It covered equity investements directly into the start-up business or indirectly through a recognize start-up fund established in the EEA.
In February 2017 the Tax shelter was expanded to inlcude investments via approved crowdfunding platforms. In addition to the tax shelter benefits, the new legal framework for crowdfunding platforms also entails benefits for crowdlending. Specifically, the provision of loans via a crowdfunding platform will be supported fiscally via a withholding tax exemption on the interest of the loans.
The following terms are applicable with regard to the loans:
- Interest from loans: no withholding tax is due on the interest from loans up to the first bracket of 15,000 Euros;
- The loans that are considered for this exemption must have a minimum maturity of four years;
- The withholding tax exemption is only applicable insofar as the relevant loans have been provided to start-up companies.
Supporting Belgian start-ups that are facing a funding gap.
Minister of Digital Agenda, Alexander De Croo.