The tax authorities’ guidance reflects a judgment of the Court of Justice of the European Union (CJEU) in Commission v. Belgium, C-387/11 (25 October 2012).
Read TaxNewsFlash-Europe: Belgium - Taxing dividend, interest income of non-resident investment companies
Guidance for refunds of withholding tax
The administrative circular pertains to withholding tax on dividends paid or attributed to non-resident investment companies for the tax periods 2007-2012. Under the guidance:
- Investment companies established in the European Economic Area (EEA) may be eligible for refunds of withholding tax, provided they are in compliance with provisions of the European Undertakings for Collective Investments in Transferable Securities (UCITS) Directive.
- Investment companies established outside the EEA may also be eligible for refunds, provided there is compliance with the European UCITS Directive as well as other criteria.
The new guidance also has consequences for Luxembourg funds (e.g., SICAVs).
The scope of the circular appears to be limited, and some issues need to be clarified by the Belgian tax authorities. For instance, the circular only refers to withholding taxes on dividends levied after 1 January 2007.
However, it appears that taxpayers that filed protective refund claims before 2012 would be eligible for refunds for taxes levied before this date, based on application of the five-year limitations period.
Also, the circular does not address a question concerning the discriminatory tax treatment of outbound interest to foreign investment funds.
Read a March 2013 report [PDF 57 KB] prepared by the KPMG member firm in Luxembourg: Belgium to grant refunds to UCITS compliant corporate investment funds
Read a March 2013 report prepared by the KPMG member firm in Belgium: Administrative circular gives first guidelines in the field of Aberdeen claims