Memos and publications

The European Commission has officially asked Luxembourg to amend its legislation on inheritance tax. This legislation stipulates additional conditions for non-resident heirs and, in particular, freezes their entire estates until they provide 'an additional guarantee'. This freeze rule does not apply to resident heirs and therefore constitutes a discriminatory practice. The Commission takes the view that this discriminatory arrangement is disproportionate, if not unjustified, and that it is contrary to the provisions of the Treaty on the Functioning of the European Union concerning the free movement of capital (Article 63).

On the occasion of Realty 2010, the International forum for Real Estate, that took place in Brussels from 18 to 20 May 2010, Tiberghien and Altius published the “Real Estate Gazette”. 

During the budget negotiations for 2010, the Belgian government announced amongst others a cap on the notional interest deduction (cap of 3.8%). Furthermore, a stricter application of the Belgian participation exemption for dividends has been announced. In this respect, the status of Belgian Investment Company becomes even more important.

The draft Royal Decree that specifies how to value the benefit-in-kind for the private use of company mobile phones, in order to determine social security contributions, was recently withdrawn by the Council of Ministers, amid great controversy.

When a person performs professional activities in different EU Member States the general principle states that he/she can only be affiliated to the social security legislation of one member state.

In private equity, holding companies established in Belgium are often used to benefit from the attractive capital gains tax treatment in that jurisdiction. In Belgium, capital gains on “normally” taxed participations (EU and non-EU) are exempt from corporate tax.

The European Commission reproached Portugal for taxing interest received by non-Portuguese financial institutions more heavily than interest received by Portuguese financial institutions.  The European Commission brought the case before the European Court of Justice ("ECJ").

The conclusion is that if a Belgian resident - in particular a financial institution - is subject to withholding tax in Portugal or in other EU Member States, it could be worth checking whether or not an objection could be raised in those Member States, if only to avoid prescription.

By Program Law of December 23, 2009, a new provision for payments to tax havens has been introduced in Belgian income tax law.

This report mainly focuses on the aspects of Belgian tax law which may be relevant for (foreign) companies operating in Belgium.