Notional interest deduction rates for the 2021 and 2022 tax years
Notional interest deduction rates for
the 2021 and 2022 tax years
February 2021 – The rates of the notional interest deduction (DIN/NIA, risk capital allowance) are set annually. The rates for the tax year 2021, but also for the tax year 2022 have been published in the Belgian Official Journal of 8 December 2020.
Decrease compared to the tax year 2020
The basic rate of the risk capital deduction for the 2020 tax year was 0.726%.
This basic rate has decreased significantly and is even negative for both the 2021 and 2022 tax years.
For the 2021 tax year, the basic rate is "- 0.092%".
For the 2022 tax year, it is "- 0.160%".
SMEs benefit from an increased rate, i.e. 0.5% in addition to the basic rate. In other words :
for the 2021 tax year: 0.408%;
for the 2021 tax year: 0.340%.
Calculation of the DIN rate
Since 2014, the rate of the notional interest deduction is calculated on the basis of the average of the J benchmark indices for ten-year linear bonds for the months of July, August and September of the penultimate year preceding the tax year. For the 2022 tax year, this was the average of the benchmark indices for July 2020 (0.096), August 2020 (-0.198) and September 2020 (-0.185), making a negative total of -0.160%.
Small companies (SMEs) benefit from a small surcharge of 0.5%, so that they can apply a deduction of 0.340% for the 2022 tax year. For the application of this rule, a small company is defined as a company with legal personality which, on the balance sheet date of the last closed financial year, does not exceed more than one of the following criteria (article 1:24, § 1 to § 6 CSA - Code of Companies and Associations):
number of employees employed, as an annual average: 50 ;
annual turnover, excluding VAT: EUR 9 million;
balance sheet total: €4.5 million.
Maxima
The new rate may never deviate by more than one percentage point from the rate of the previous tax year. Similarly, the rate can never be more than 3% for "large" corporations and 3.5% for SMEs.
Neither limit was exceeded this year.
Calculation of risk capital
To determine the notional interest deduction to which you are entitled, you must look at the average increase in equity over a five-year period. Namely: the risk capital amounts to one fifth of the positive difference between the adjusted equity capital at the end of the current financial year and the adjusted equity capital of the previous fifth financial year.
Negative amounts
The notional interest deduction for ordinary companies is therefore negative for both tax years. Upon publication of the new rates on December 8, 2020, the Administration indicated that the Minister of Finance would propose an amendment to the law so that the risk capital deduction would not apply (that the rate be set to zero) when the rate is negative.