Corporate Treasury & Cash Management in Belgium

Corporate Treasury & Cash Management in Belgium

At a glance

About Belgium 

Belgium’s economy has a widely diversified industrial base, which benefits from the country’s highly developed transportation infrastructure and government support for open trade and investment. Belgium is heavily reliant on world trade, with the export of goods and services being the largest contributor to its gross domestic product (GDP). 

The regulatory environment in Belgium is highly efficient, and its unique tax regime offers several advantages, such as notional interest deductions and a corporate income tax rate of 25%. Moreover, Belgium’s central geographical location and efficient transport infrastructure make it an ideal logistical base. 

The Belgian banking system is highly sophisticated with minimal regulatory requirements and an extensive tax treaty network. More than half of Belgium’s banking transactions are international due to the extent of foreign business conducted there.  

Around 80% of Belgium’s trade is with other European Union (EU) member states, with the United States also an important export partner. 

Corporate Treasury in Belgium

Belgium was one of the founding members of the EU. In this section, we highlight some of the key factors relevant to treasury and cash management in Belgium.  

Financial Market Development 

  • Brussels is ranked 37th in the 2021 Global Financial Centres Index by Z/Yen Group. 
  • Belgium has excellent business infrastructure, a highly educated multilingual workforce and a sound legal environment.  
  • There are no foreign exchange controls in Belgium.  
  • As part of its Sustainable Finance package, the EU has proposed a new European Green Bond standard to act as a ‘gold standard’ for companies and governments raising money for environmentally-friendly projects. 

Sophistication of Banking Systems 

  • There are more than 80 banks in Belgium, the majority of which are branches or subsidiaries of foreign banks.  
  • Belgium has a well-developed debt market with both government and corporate bonds widely available. Outstanding debt securities stood at USD857 billion at the end of 2020.  

Regulatory Bodies 

  • The banking industry is regulated by the National Bank of Belgium (NBB) and the Financial Services and Markets Authority. As a eurozone country, it is also covered by the Single Supervisory Mechanism (SSM).  


  • The corporate income tax (CIT) rate is 25%. A surcharge of 6.75% on the final CIT amount is due under certain circumstances. For small-and-medium-sized enterprises (SMEs), the first EUR100,000 of profit is taxable at 20%.  
  • Companies with taxable profits of more than EUR1 million face a minimum tax base through the limitation of some deductions. Certain deductions, such as current year tax losses, are fully deductible. Others, such as tax losses carried forward, can only be claimed for up to 70% of profits over EUR1 million.  
  • Resident companies are taxed on their worldwide income, whilst non-resident companies are taxed on Belgium-sourced income. There is no branch profits remittance tax on the remittance of profits to the head office by the branch of a foreign company.  
  • The standard rate for Value Added Tax (VAT) is 21%, with certain goods and services qualifying for lower rates of 0%, 6%, 12% or are VAT-exempt.  
  • Capital gains on the disposal of qualifying shares are fully tax exempt, subject to meeting certain conditions. For non-qualifying shares, capital gains are taxed at 25%.  
  • Interest income is taxed as corporate income. Interest expenses are generally tax deductible but only up to 30% of the taxpayer’s fiscal earnings before interest, taxes, depreciation, and amortisation (EBITDA), or EUR3 million, whichever is higher. Borrowing costs above this level can be carried forward for an unlimited period of time. Taxpayers belonging to the same group also have the option to transfer unused EBITDA capacity to other member companies under certain conditions. The old thin capitalisation rule, under which interest payments in excess of a 5:1 debt-to-equity ratio are not tax deductible, continues to apply to interest payments to tax havens.  
  • Stamp duty is applicable on transactions relating to public funds that are concluded or executed in Belgium, however, exemptions are available.  
  • Withholding tax (WHT) on dividends and interest is typically charged at 30% to both resident companies (with some exceptions) and non-resident countries, where no tax treaty is in place. Where a tax treaty is in place and the non-resident can provide a Certificate of Residence, rates range from 0% to 25% on dividends and interest.  
  • Belgium has tax treaties with over 95 countries and territories.  
  • Belgium is a signatory to the Organisation for Economic Co-operation and Development’s Multilateral Competent Authority Agreement, through which information is exchanged between tax administrations, to provide a single, global picture on some key indicators of economic activity within multinational enterprises.  

Benefits for Regional Treasury Centres 

  • Belgium is growing in popularity as a location for shared service centres, with the government naming the development of this sector as a key priority.
  • Cash concentration and notional pooling are available in Belgium on a domestic and cross-border basis, but each group within a company must be treated as a separate legal identity, which can have tax implications. 
  • Belgium is a eurozone country with trading hours that overlap with Asia, Europe and North America. 

Bank Accounts 

  • Residents may hold foreign and domestic currency accounts both domestically and overseas. Domestic currency accounts are fully convertible into foreign currency. 
  • Non-residents may hold foreign and domestic currency accounts both domestically and overseas. Domestic currency accounts are fully convertible into foreign currency. 
  • Interest is available on current accounts and term deposits. 

Legal and Regulatory 

  • The NBB is an autonomous institution and a member of the European System of Central Banks (ESCB). The European Central Bank (ECB) supervises banks within the eurozone that are regarded as 'significant' through the SSM. Other 'less significant' banks are supervised by the national central bank, such as the NBB. 
  • There are no foreign exchange controls in place. 
  • A company is resident if it is registered in Belgium or its main management activity or location of effective management is carried out in Belgium. 
  • Belgium has set up a financial intelligence unit, the Financial Information Processing Unit (CTIF-CFI), which is a member of the Egmont Group. 

The Payment Services Directive (PSD2), which is law across all EU Member States, provides enhanced consumer security in the developing financial technology (fintech) environment i.e., for electronic payments such as mobile payments, credit transfers, online payments and direct debits.

Measures include: 

  • Prohibition of surcharges on credit/debit card payments. 
  • Imposition of strict security requirements including the protection of financial data. 
  • Increased competition between European payment service providers. 
  • Greater consumer rights, such as ‘no questions asked’ refunds on direct debits in euros.  

Payment Systems 


(Trans-European Automated Real-time Gross Settlement Express Transfer system) 

The eurozone's Real-time Gross Settlement (RTGS) system 
  • Operates on behalf of the Eurosystem, the monetary authority of the eurozone. Three Eurosystem central banks – Banca d’Italia, Banque de France and Deutsche Bundesbank – provide the Single Shared Platform (SSP) of TARGET2. 
  • Processes high value and urgent EUR-denominated domestic and cross-border credit transfers.  
  • Activates final settlement of participants’ net balances from STEP2 (pan-European Automated Clearing House). Settles transactions in real time and with immediate finality.  
  • Transactions are processed electronically using Society for Worldwide Interbank Financial Telecommunications (SWIFT). Final settlement is done across participant banks’ correspondent accounts held at the SSP. 
  • Has 18 direct and 58 indirect participants. 
STEP1  Pan-European net settlement system 
  • Operated by Euro Banking Association (EBA) Clearing. 
  • Processes low-value (no minimum value threshold) and non-urgent euro-denominated commercial payments. 
  • STEP1 is open to all banks in the EU and has access to EURO1 platform. 
  • Operates SWIFT messaging. 
STEP2  Pan-European Automated Clearing House (ACH) 
  • Operated by EBA Clearing. 
  • Processes low-value, non-urgent and bulk euro-denominated retail payments. Provides straight-through processing for interbank transactions. 
  • Settlement done the same or the next day, depending on time of submission. 
  • A pan-European real-time infrastructure for EUR-denominated transactions is under development by EBA Clearing and Italy's SIA Group (one of the operators of STEP2). 
  • Cross-border transactions can be processed through SWIFT and overseas correspondent banks. 


(Centre for Exchange Clearing and Settlement Mechanism)

Automated multilateral network settlement system 
  • Operated by Systèmes Technologiques d’Echange et de Traitement (STET) and accesses France’s CORE platform. 
  • Processes Single Euro Payments Area (SEPA) payments; low-value, non-urgent and bulk retail transactions; cheque payments of less than EUR25 million; bills of exchange; card payments; and e-money transactions. 
  • Cross-border, EUR-denominated transactions are done through EURO1 (supported by BNP Paribas Fortis, ING Belgium and KBC Bank), STEP1 or STEP2 payment systems. 
  • A pan-European real-time infrastructure for EUR-denominated transactions is under development by EBA Clearing (which operates EURO1, STEP1 and STEP2) and Italy’s SIA Group (which is an operator for STEP2). 
  • Has 14 direct and 32 indirect participants.  


Single Euro Payments Area 

Pan-European payment infrastructure 
  • Initiated by the European Payments Council (EPC). Operates a common set of payment instruments, infrastructures, procedures and standards for euro transactions within Europe.   
  • Electronic retail payments within SEPA are regarded as domestic payments. SEPA is not applicable to urgent, high-priority payments or cheques. 
  • SEPA countries include 28 EU member states and four European Free Trade Association member states (Iceland, Liechtenstein, Norway and Switzerland). 
  • There are two SEPA payment instruments: SCT Inst and SDD (see below). 

SCT Inst 

SEPA Instant Credit Transfers 

Pan-European instant payments system 
  • Operated by the EPC. 
  • 585 participants. 
  • Currently there are eight participating countries: Austria, Estonia, Germany, Italy, Latvia, Lithuania, the Netherlands and Spain. The network will progressively cover all 34 European countries with access to SEPA. 


SEPA Direct Debits 

Pan-European direct debit system 
  • Operated by the EPC. 
  • 585 participants. 
  • There are two types of SDD: SDD Core for consumers and SDD B2B for businesses.  
  • Operates whereby the payer has to give approval via a mandate provided by the biller electronically or on paper. Otherwise known as creditor-driven mandate flow. 
RT1  Pan-European real-time EUR credit transfer system 
  • Operated by EBA Clearing, which also operates EURO1, STEP1, STEP2 and Italy's SIA Group. 
  • 28 participants. 
  • A pan-European real-time infrastructure for EUR-denominated SEPA transactions. 
  • Supports transactions compliant with SCT Inst scheme. 
  • Messaging is in line with ISO 20022 or SWIFT FIN standard. 
EURO1  Pan-European real time gross settlement (RTGS)-equivalent net settlement system 
  • Operated by EBA Clearing. 
  • Processes high-value (no maximum value threshold) and urgent EUR-denominated domestic and cross-border payments. 
  • Payments processed with immediate finality and are irrevocable. 
  • Operates SWIFT messaging. 


Payment Instruments 

Credit Transfers 

  • Credit transfers are all automated in Belgium and are the most important form of cashless payment, representing 36.3% of volume and 96.7% value of all cashless payments in 2020.  
  • High-value and urgent credit transfers are settled through TARGET2_BE in real time. 
  • Low-value and non-urgent SEPA transactions are cleared the same or the next day through CEC CSM. 
  • Used for payroll, supplier and third-party payments. 
  • The SEPA Credit Transfers (SCT) scheme is used for retail transactions and is available for urgent and high priority payments (no maximum threshold) within the SEPA.  

Direct Debit (auto debits) 

  • Used for low-value, regular transactions such as utility bills. 
  • CEC CSM clears all SEPA direct debits. 
  • The SDD scheme is used for urgent and high priority retail payments (no maximum threshold) within the SEPA. It is mandatory for all banks in the eurozone to offer SDD facilities and banks outside of the eurozone are required to accept SDD transactions. High value transactions of more than EUR500,000 can be processed through TARGET2. 
  • Direct debits in Belgium account for 11.3% and 1.7% of cashless payment volume and value, respectively. 

Card Payments 

  • Payment cards are the most popular form of cashless payment, especially debit cards used with contactless (touch-and-go) systems. 
  • Card payments make up the majority of cashless payment volume, accounting for 50.7% in 2020, but only 1.3% of cashless payment value. 
  • The main payment card brands (excluding Mister Cash) are Visa and MasterCard, with American Express and Diners Club credit cards also in circulation. All payment cards are SEPA and Europay, MasterCard and Visa (EMV) compliant. 
  • Card payments are usually processed through Atos Worldline card processing centre, which is linked to the CEC CSM system. 
  • Reloadable prepaid payment cards are available and are offered by many banks, such as the Hello prepaid card and Moneytrans. 

Online Payments 

  • The fintech sector is dominated by services linked to digital payments, due to Belgium’s established presence in the payment industry (SWIFT and Euroclear are headquartered there) and the fast adoption of online transactions.   
  • The government does not have regulation in place specifically focused on the fintech sector. However, the NBB and the Financial Services and Markets Authority (FSMA) are supportive of developments in technology innovation and the financial sector, and they manage applications within the existing regulatory framework.  
  • The FSMA has launched a fintech portal on its website as a networking platform for fintech companies to interface with the authorities and other industry players.    
  • Online transactions have been widely adopted, with payments mainly done using payment cards or online banking. A popular local payment platform, Ogone, offers a variety of payment methods, such as online banking or credit cards. Other global digital payment systems with a market presence are PayPal, Android Pay and Sofort.  
  • Belgium’s e-commerce market is worth EUR10 billion, of which 15% is mobile commerce. Online spending is a growing segment and has made up a fifth of retail spending over recent years. 

Digital Currencies 

  • There is an active market in cryptocurrency, although the FSMA has not issued any regulations, other than advising extreme caution. 
  • A recent court ruling in Belgium classified bitcoin activities as ‘speculative’, and thus, any profits earned were liable to 33% capital gains tax. 
  • The EU’s overall view of bitcoin is that “no member state can introduce its own currency”. Cryptocurrency exchanges are legal, depending on the country, and should be operated under the Anti-Money Laundering Directive, according to the European Commission. 

Cash, Cheques and Money Orders 

  • Cash continues to be the predominant form of payment, due to a combination of an overabundance of automated teller machines (ATM) in Belgium and a lack of digital payment systems at smaller shops and other service providers.  
  • Cheque usage is in rapid decline, in line with the phasing out of Eurocheques and the rapid increase in electronic transactions. Belgian banks are imposing charges to discourage cheque usage as the payment system will not be part of SEPA. If cheques are used, it is usually for one-off, high-value payments such as property purchases. 
  • Irregular cheques are truncated into electronic images and processed as credit transfers. Foreign or high-value cheques (of more than EUR25 million) are processed manually and cleared bilaterally between banks. 
  • Low-value cheques are cleared through CEC CSM. 
  • Money orders are available through postal orders, for domestic or international transfers, or Western Union and Moneygram for international services.

For more information, login to Treasury Prism for contextual insights on market regulations that are relevant to your cash management structure.

Sources (Intro & Corporate Treasury): 
World Economic Forum, PwC, Bank for International Settlements, Trading Economies, CIA World Factbook, IMF, the National Bank of Belgium, The Heritage Foundation, OECD, DBS, TheBanks.EU, European Banking Federation, European Central Bank.

Sources (Banking & Payments): 
The National Bank of Belgium, DBS, TheBanks.EU, European Banking Federation, European Central Bank, Association for Finance Professionals, Ecommerce News Europe, Statista, J.P. Morgan.

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