MercLin Institutional fund
MercLin Institutional Fund is a Belgian institutional fund that offers companies the possibility to combine an investment in an actively managed equity portfolio with an optimized investment taxation through its DBI-RDT status.
Corporate taxation for equity investments
Since the taxation reform of the end of 2017 – and with effect from income year 2018 – companies, subject to Belgian corporate tax, are no longer eligible for a tax exemption on profits from equity investments, except when such investments in individual assets meet the conditions below:
- the minimum investment must amount to €2.5 million or
- the investment pertains to a 10% stake in the company distributing the profit and
- the capital gains are realised after a period of investment in the share of at least 1 year.
These conditions make it impossible for many companies to build up a diversified equity portfolio in a fiscally attractive manner. For these companies, a DBI-RDT sicav provides a valid alternative by combining risk spreading with attractive taxation.
The Belgian DBI-RDT sicav offers companies – as of income year 2018 – a 100% tax exemption on the dividends paid out and on the capital gains on its units. Only when these investments in individual assets meet the conditions below, are profits exempted from tax:
- the DBI-RDT sicav may only invest directly in equity. Investments via equity funds are not authorized.
- the tax exemption applies only for dividends and capital gains on shares of companies that are liable for a ‘normal’ tax rate. Shares in companies established in a tax haven are excluded from this system.
- the DBI-RDT sicav must pay out annually 90% of the received income (interest, dividends and realised capital gains) to its shareholders, after deducting salaries, commissions and charges.