According to the Belgium-French Tax Treaty, France is allowed to tax at the source the dividends paid by French companies but the rate of the tax is limited to 15 % when the dividend is paid to individuals. On its side, Belgium being the State of the beneficiary’s resident is allowed to tax the dividend according to its own tax rate (30 % for the time being). In order to eliminate the double taxation, the tax Treaty provides that the Belgian Tax should be reduced by a flat-rate tax credit (quotité forfaitaire d’impôt étranger/Forfaitair gedeelte van buitenlandse belasting) deductible under the conditions of Belgian tax law but at a minimum rate of 15 %.
The tax credit was abolished by the Belgian law in 1988. As from that year, the Tax authorities refuse to apply the tax credit on French source dividends. The Belgian supreme court (Cour de cassation) ruled in 2017 that international law (including tax Treaties) prevails on internal law and that the tax credit is to be granted to individuals receiving dividends from French companies. The Court of appeal of Antwerp to which the case was transferred has now confirmed the application of the Tax credit (Anvers, 17 December 2019).
Interested taxpayers resident of Belgium should check how to benefit from this ruling, including for the past.
Article written by André Bailleux
Avocat – Advocaat – Lawyer
Chargé de cours émérite à l’UCL/Mons
Wantiez, Bailleux, Causin & Janssen
Member Law & Numbers
Brussels, 7 February 2020