Tax losses can generally be carried forward and used to offset profits, but important conditions apply.
Carried-forward losses can be applied in future years as long as the company continues to exist and generates profits against which the losses can be offset. In theory, an acquirer can continue to use these losses, provided the company remains operational.
In the case of a change of control of a company upon the acquisition of shares, carried-forward losses may be definitively lost under Article 207, paragraph 8 of the Belgian Income Tax Code (WIB 92) if the change is not driven by legitimate financial or economic needs. The Belgian tax authorities may require that the acquisition has a legitimate economic rationale. If such rationale cannot be demonstrated, the tax authorities may partially or fully deny the use of carried-forward losses. For real estate companies with a single property and no employees, the risk of denial is particularly high, especially if the acquisition is primarily motivated by tax purposes and no activity or employment is retained.
For companies with multiple properties and an active rental business, the scenario is more favorable. As long as the activity continues effectively and unchanged, and the acquisition can be documented with non-tax motives—such as acquiring an existing portfolio, achieving economies of scale, or continuing the activity—the risk is moderate. Simply avoiding taxes or incorporation costs is not considered a legitimate economic purpose.
Documenting the economic rationale is crucial. Contracts, lease agreements, a business plan, or an external valuation can demonstrate that the company remains active and generates profits. The tax authorities assess the overall context of the transaction: without a clear economic motive, the acquirer may lose the ability to utilize the tax losses, regardless of their amount.