ECJ – Recent Developments in Direct Taxation 2014

I. S. 20Introduction

On 20 November 2013, the Commission decided to bring an action before the ECJ concerning the manner in which Belgium taxes, on the one hand, dividends and interest distributed to a Belgian investor by non-resident foreign cooperative societies and companies pursuing a social objective (Case 2008/4802) and, on the other hand, interest paid to non-resident collective investment companies (CICs) and certain interest paid to non-residents on securities deposited with a non-Belgian financial institution (Case 2008/4157). According to the website Taxud-unit-d3@ec.europa.eu, the case is still pending before the ECJ but seems not to have received a case number yet^. No Advocate General’s opinion has been delivered yet.

II. Facts

The rules that are relevant for Case 2008/4802 are as follows. Pursuant to Article 21, 6° of the Belgian Income Tax Code (“BITC”), the first tranche of dividends (i.e. 190 €) distributed by cooperative societies is tax exempt if the distributing company is recognized by the Nationale Raad voor Cooperatie/Conseil National de la Coopération. The Commission claims that only cooperative societies established under Belgian law are recognized. Pursuant to Art...