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Belgium Told To Implement EU Tax Exemptions

by Ulrika Lomas, Tax-News.com, Brussels

18 October 2013


The European Commission hopes that taking Belgium to court will ensure the country's application of tax exemptions that have been granted to European Union (EU) institutions.

The Commission says that Belgium is not complying fully with the provisions made by the EU's Protocol on Privileges and Immunities. It considers that institutions are to be exempted from indirect taxes or sales taxes by the governments of the member states in which they are established, when they make substantial purchases for their office use in Brussels.

Since the adoption of the Orders on the organisation of the electricity and gas market in the Brussels Capital Region, invoices for electricity and gas consumption in such buildings have included the taxes laid down in these Orders.

The Commission does not agree with the Belgian Government on this matter. It argues that these regional taxes are indirect taxes which should be covered by the exemption. The exemption is designed to prevent a member state which hosts an institution on its territory from benefiting from this presence, and thereby obtaining a tax advantage.

Legal proceedings were brought under Belgian law in 2011, seeking the proper application of the exemption and the refunding of the amounts already paid by all the institutions. The case is still pending before the Belgian courts. The Commission pressed Belgium on the issue in February, 2012, but the Government has maintained its position and refused the exemption.

TAGS: court | compliance | tax | European Commission | sales tax | tax compliance | Belgium | tax incentives | law | tax rates | tax breaks | tax reform | European Union (EU) | Europe

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