To bear losses of a company: there should be a remuneration

To bear losses of a company: there should be a remuneration

To bear losses of a company is not tax deductible. There is one exception, when the director by doing so tries to maintain his professional income from this company. Which professional income is concerned in this case?


Mr. JB is unpaid director of company X. But at the same time, he invoices certain services to X. In 2011 and 2012 he bears the losses of the company and deducts these amounts following article 53, 15° ITC92.

The tax authorities disagree and reject the deduction. Article 53, 15° ITC92 only allows the tax deduction when bearing the losses of the company is done 'with the intention to maintain the professional income the tax payer periodically obtains from this company'. Since at that time JB was unpaid director, this condition is not fulfilled.

But the question is whether the income from the services JB invoiced to the company can be ignored. In other words, the professional income as meant in article 53, 15° ITC92: is this only director's remuneration or can this also be other income?


The Court of Appeal in Antwerp should deal with this case, but before doing so it raises a prejudicial question to the Constitutional Court. It wants to know whether 'professional income' should be limited to 'company remuneration' or whether other income (such as salaries and profit) also can be taken into consideration.

According to JB 'professional income' should be read literally. This notion is also used in the general article 23, §1 ITC92 where it is defined as income deriving from all kind of activities (including profit and gains).

Additionally, according to JB, discrimination is created in case you would only allow deduction to directors receiving director's fees and not to directors obtained other kinds of income from the company. At the time, the legislator's intention was to prevent tax avoidance by creating tax losses without income being generated from that company. The difference between directors receiving director's fees and directors invoicing services to the company, is in this respect not relevant.

Constitutional Court

The Constitutional Court dives into the preparatory work and finds that it was the legislator's intention to only grant tax deduction to maintain income they periodically obtain for activities performed in the company.

A director invoicing his services to the company can according to the Court not be considered as income for activities performed in the company.

It should be borne in mind that it is not sufficient to grant an income to the director. Bearing the losses should be done to maintain the director's income, meaning that the director should receive such income before the losses are borne. The income should be periodically (this should not be monthly) and after all bearing the losses should be done by paying an amount of money which is used to pay off the losses.