The notional interest deduction equals a percentage (based on the return on a 10-year state bond – maximum 3% as from assessment year 2013) of the equity (including retained earnings), determined according to Belgian accounting law. Participations in other companies and real estate used by directors a.o. have to be deducted from the equity. The unused deduction will no longer be transferable. A transitional regime will be introduced for the stock of unused deduction at the end of assessment year 2012 (both measures are not enacted yet).
Together with the repeal of the 0,5% registration duty on capital contribution since January 1, 2006, this measure benefits small- to medium-sized enterprises (SMEs) and larger companies (national and international) by encouraging the strengthening of their equity.