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Friday, 27 September 2019

New circular letter regarding article 19bis ITC and possibilities to claim refund of withholding tax

The Belgian tax administration issued a new circular letter on article 19bis ITC (circular letter of 25.09.2019).

Before 2013, the scope of article 19bis ITC was limited to Funds from outside the EU and UCITS funds (“European investment funds with an EU passport”). As from July 2013, the scope of article 19bis ITC was widened in order to include “European investment funds without an EU passport”.

At first, the Belgian administration was of the opinion that investment companies investing in non-listed securities could not fall within the new scope of article 19bis ITC (as stated in circular letter of 25 October 2013, Ci.RH.231/629.328, n°28). Due to technical changes in financial law as of 2014, the Belgian administration revised its opinion in its addendum to the circular letter (addendum of 8 April 2016) by stating that investment companies fall within the scope of 19bis ITC regardless of their investment policy.

The program Act of 25 December 2017 changed the wording of article 19bis ITC by replacing the term “Undertakings for the Collective Investment in Transferable Securities” by “Undertakings for Collective Investment”. The impact of this change in terminology was not entirely clear. In his answer to a parliamentary question (13 February 2019), the Minister of Finance explicitly stated that UCI’s that invest in non-liquid assets only fall within the scope of article 19bis ITC since the entry into force of the amendment of the scope of 19bis ITC by the program law of 25.12.2017 (click here). The new scope of article 19bis ITC (including UCI’s that invest in non-liquid assets) is applicable to income paid or attributed in relation to units/shares acquired as from the first of January 2018. The Belgian administration has now confirmed the opinion of the Minister of Finance in its new circular letter of 25 September 2019.

The new circular letter gives the possibility to claim back the withholding tax withheld on income paid or attributed in relation to units of UCIs investing in non-liquid assets (this includes in our opinion UCI’s investing in non-listed securities / private equity), to the extent that the shares/units in the UCI were acquired by the Belgian resident individual (“habitant du Royaume/rijksinwoner”) before the first of January 2018. The withholding taxes can be claimed back up to 5 years following the first of January of the year in which the withholding taxes were paid.

 

Find related article in Fiscologue.

Feel free to contact us if you would have any further questions in this regard.

Christophe Coudron - Counsel (christophe.coudron@tiberghien.com)
Dirk Coveliers - Counsel (dirk.coveliers@tiberghien.com)
Anouk Van der Mast - Associate (anouk.vandermast@tiberghien.com)

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