When a company manager (administrator, manager or liquidator) rents a building (of which he is the owner, proprietor, leaseholder, building lease holder or beneficial life interest holder) to the company or association in which he conducts his activity, the rent benefits he receives by virtue of article 32, 3°, WIB 92 are considered as a professional income, provided that the rent does not exceed 5/3 of the revalorized cadastral income. The added value coefficient for the cadastral income is set at 4,23 for the tax year 2015 (income 2014).
Withholding tax shall be applied on the part qualified as professional income. When the rent is paid monthly, the part of the rent income that is considered as a professional income must be treated as a periodic remuneration; it can be added to the remuneration of the month concerned and it is subject to withholding tax, just as the periodic remuneration. The amount must also be stated on the tax form of the company manager (tax form 281.20).
Example: An administrator rents a building with a cadastral income of € 2,000.00 to his company. The annual limit is € 14,100 (= 2,000 x 4.23 x 5/3). The company pays a monthly rent of € 1,500, i.e. € 18,000 per year to the administrator; consequently, there is a positive balance of € 3,900. This amount of € 3,900 is considered as a professional income and it must be subjected to withholding tax.
Source: Royal Decree of 19 May 2014 amending the Royal Decree for the implementation of the ‘Income Tax Code 1992’ with regard to the section of the added value coefficient for cadastral income, M.B. 26 May 2014, 2nd ed.
Auteur: Isabelle Caluwaerts