Corporate Tax Alert (19/03/2013)
Belgian tax administration issues circular letter on the procedural aspects of the recovery of Belgian dividend withholding tax
On 25 October 2012 the Court of Justice of the European Union (“CJEU”) ruled that, by maintaining different rules for the taxation of income from capital and movable property according to whether it is earned by resident investment companies or non resident investment companies with no permanent establishment in Belgium, Belgium has failed to fulfill its obligations under Articles 49 TFEU and 63 TFEU, and Articles 31 and 40 of the Agreement on the European Economic Area of 2 May 1992. In other words, the CJEU considers that the application of Belgian withholding tax on Belgian source dividend distributions and interest payments to non-resident investment companies is in violation of the freedom of establishment as well as the free movement of capital.
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