DEFINITION:
Under article 185/2, § 1, Belgian Income Tax Code 1992 (BITC 92), a “CFC income” is defined as the non-distributed profit of a qualifying PE or CFC (as defined in art. 185/2, § 3, BITC 92) that must be included in the Belgian taxpayer’s taxable base (that are not excluded according to art. 185/2, § 4, BITC 92). It is computed by a 4-steps method detailed in article 185/2, § 2, BITC 92, which is summarized as follows:
1)	determining the CFC’s profit as if it were established in Belgium (art. 185/2, § 2, par. 2, BITC 92);
2)	limiting to the undistributed portion (art. 185/2, § 2, par. 3, BITC 92);
3)	limiting to the portion that is passive income (see list below) relative to the CFC’s total income (art. 185/2, § 2, par. 4, BITC 92); and
4)	limiting to the highest of the Belgian company’s direct percentages in voting rights, capital, or profit entitlement (art. 185/2, § 2, par. 5, BITC 92)
TYPES OF INCOME COVERED:
For step (3) above, as defined in article 185/2, § 2, par. 4, BITC 92, the “passive income” captured by the Belgian CFC rules includes, to the extent not treaty- or domestically exempt:
-	interest (and equivalent);
-	royalties (income from intellectual property);
-	dividends and income from the disposal of shares, bonds, options and similar securities;
-	rental income, including operational or financial leasing;
-	income from asset management, investment, insurance, banking and other financial activities;
-	income from the purchase and sale of goods or services to which the CFC adds little or no economic value.