15 Legal persons engaged in a non-profit activity, legal estates and associations are subject to an annual tax rate of 0.17% in lieu of inheritance tax if their assets amount to more than EUR 25,000. In connection with the establishment of a foundation upon death, the inheritance regulations of “reduction” and “restitution/allowance” are to be considered. Endowments may not amount to more than fifty percent of the assets if the endower leaves behind one child; one third if the endower leaves behind two children and one fourth in the case of three or more children. Relating to spouses endowments may correspond to the full amount to the assets. 3.2.2. Current taxation Taxation of the Foundation Pursuant to Article 150, an annual amount of 0.17% is to be paid, as a tax compensation for the inheritance tax, on the entire property of the foundation (with the exception of securities that the foundation holds in own trading companies). In accordance with Article 220 of the Belgian Income Tax Act, the foundation is subject to taxation for legal persons with its in- come. The tax assessment basis is composed of the following forms of income: ? Income from imoveable assets if the real property is used commercially, the net rental is to be taxed on the amount that ex- ceeds the indexed cadastral income. The net rental corresponds to the gross rental less the rental costs (flat rate of 40% for developed properties or 10% for non-developed properties). The applicable tax rate amounts to 20 %17. If the real property is not used commercially, only land and building tax is levied. ? Income from moveable assets and capital is subject to withholding tax at source which has the effect of final taxation for the recipient (15% or 25% depending on the type of income). ? Income from „diverse sources“ and „non justified payments“ This includes the added value realized in the sale of properties, which is taxed at a rate of 16.5% or 33%. A tax of 309% may be levied for payments the recipients of which are not disclosed to the financial authorities; these payments also include unjustified salaries and remuneration payments. Taxation of the administrative office In accordance with Article 181 of the Income Tax Act, different rules may apply to founda- tions that are operated as administrative offices; these are treated as legal persons for tax 17 Cf. ibid, p. 696