• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/16/2013

Belgium - No credit for withholding tax on dividends received 

July 16: The Belgian government, in the context of the budget control for 2013 and for 2014, has agreed that withholding tax (imposed at a rate of 25% on dividends received by Belgian investment companies) would no longer be creditable and refundable.

The provision, once enacted, would implement a judgment of the Court of Justice of the European Union (CJEU) from the 2012 case, Commission v. Belgium, into Belgian tax law.

Impact on foreign investment companies

Under this provision, foreign investment companies that are subject to Belgian withholding tax would no longer be discriminated against from a European law point of view because both resident and non-resident funds would be subject to withholding tax without any possibility to claim a credit (or seek a refund) for the amount of tax withheld.

If the proposal is enacted, the possibility to seek refunds of withholding tax based on a CJEU case (known as the Aberdeen case) would no longer exist.

Possible effective date

The new tax regime for Belgian investment companies is likely to apply as from 2013. However, the tax measure could be subject to change during the legislative process.

Read a July 2013 report [PDF 53 KB] prepared by the KPMG member firm in Luxembourg: New legislation plans in the tax regime for Belgian investment companies

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