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New Circular on the refund of Belgian Dividend WHT - 09/04/2013


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Background: Belgium condemned for discriminatory tax treatment

Further to the landmark European Court of Justice (ECJ) Santander case in May 2012 (please refer to our Operational Tax News dated 10 May 2012 in this respect) condemning France for its discriminatory tax regime of foreign investment funds, Belgium was similarly condemned on 25 October 2012 in the Commission v. Belgium case (C-387/11) for its taxation regime of investment companies.

Under Belgian law, Belgian investment companies do not effectively pay tax on their Belgian-sourced interest and dividend income as they get a refund for any Belgian withholding taxes on those income whereas foreign investment companies have to pay withholding taxes on their Belgian-sourced interest and dividend income and cannot claim refunds.

Circular letter on the procedural aspects of the recovery of Belgian withholding tax

Further to this ECJ ruling, the Belgian tax administration has recently published a Circular letter clarifying certain procedural aspects for dividend withholding tax refunds claims for non-resident investment companies.
For details on this matter, please refer to the alert issued by Deloitte Belgium.

Impact for Luxembourg investment funds

Luxembourg SICAV compliant with the UCITS Directive (Part I of the Law of 2010) should benefit from the Belgian Circular. Those SICAVs which have not yet filed reclaims up until now should prepare such claims in order to get reimbursement of the Belgian withholding tax suffered on dividend payments prior to 31 December 2012.
Please note as well that a modification of the tax regime is awaited for dividend payments as from 2013.

If you have any queries regarding the above, please do not hesitate to contact us.

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