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Belgium Upbraided Over 'Discriminatory' Taxation

by Ulrika Lomas, Tax-News.com, Brussels

01 December 2011


The European Commission has officially asked Belgium to abolish additional taxation of certain types of income from capital deriving from outside the European Economic Area (EEA) and not received or collected by an intermediary established in Belgium.

The Commission argues that the same income paid by an intermediary established in Belgium is subject only to withholding tax and cites article 63 of the Treaty on the Functioning of the European Union (TFEU), which prohibits any restriction on the movement of capital or payments between member states and between member states and third countries.

In its release, the Commission notes that in November 2010 it officially called on Belgium to amend its legislation within two months. The request, it explains, took the form of a ‘reasoned opinion’, which constitutes the second stage of infringement proceedings.

While noting that Belgian legislation was subsequently amended in May 2011, to reflect a ruling of the Court of Justice of the European Union of July 1, 2010, the Commission states that the amendments nevertheless only served to partly correct the infringement.

According to the Commission non-EEA-source portfolio dividends and interest which have not been received or collected by an intermediary established in Belgium remain liable to the additional taxation.

TAGS: tax | European Commission | Belgium | interest | law | banking | legislation | withholding tax | dividends | Europe

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