A quick valuation of Belgian notional interests

At the end of 2005, Belgian authorities introduced a tax mechanism that they call notional interests. Actually this is an implementation of a system already known in the literature as Allowance for Corporate Equity or ACE. In this paper we propose a systematic analysis of the properties of that system and show how the Belgian version could be improved to meet those properties as well as the whole set of goals that such tax reform was expected to pursue by Belgian authorities. JEL: H25