• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 11/22/2013

Belgium - Withholding tax on interest paid to foreign companies 

November 22:  The European Commission this week determined to bring an action before the Court of Justice of the European Union with respect to the Belgian withholding tax imposed on certain interest payments made to foreign investment companies or foreign financial institutions.

According to the EC release (IP-13-1105), the EC asserted that the subject Belgian law could discourage cross-border investment and that it poses an unjustified restriction on the freedom to provide services and on the free movement of capital.

Belgian withholding tax applies for payments of:

  • Interest from debt-claims not represented by securities and paid to foreign investment companies
  • Interest relating to securities deposited or registered in an account with financial institutions established outside Belgium

However, similar payments of interest made to Belgian investment companies or relating to securities deposited or registered with financial institutions established in Belgium are exempt from the withholding tax.

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