ECJ refrains from formal ruling on Belgian participation exemption as regards Belgian and non-EU dividends (16/06/2009) |
On 4 June 2009, the European Court of Justice (ECJ) delivered its decision in the cases KBC v Belgium (C-439/07) and Beleggen, Risicokapitaal, Beheer NV v Belgium (C-499/07), which involve the compatibility of the Belgian dividends received deduction (DRD) regime with the EC Parent-Subsidiary Directive and with the freedom of establishment and the free movement of capital principles in the EC Treaty.
Not surprisingly, the ECJ simply confirmed its February 2009 decision in the Cobelfret case, in which it concluded that the DRD - as it applies to EU dividends - is not compatible with the EC Parent-Subsidiary Directive. Cobelfret did not encompass the treatment of dividends received from subsidiaries resident in third (i.e. non-EU) countries or dividends received in a purely domestic (Belgian) situation. In KBC and Beleggen, however, the ECJ declined to issue a formal ruling on whether dividends received by Belgian companies from other Belgian companies or from companies resident in third countries can be treated less favorably than EU dividends. Instead, the ECJ referred these questions back to the Belgian courts to decide.
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ECJ refrains from formal ruling on Belgian participation exemption as regards Belgian and non-EU div
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