We had already previously mentioned (see Newsflash of 9 June) the issue regarding the double taxation of dividends from foreign sources for Belgian (tax) residents.
In summary, while certain double taxation treaties concluded by Belgium with certain countries, in particular France, make it possible to mitigate the double taxation of such foreign-source dividends by means of a foreign tax credit ("QFIE"; ”FBB”), the Belgian tax authorities refuse to take this into account on the grounds that this foreign tax credit was abolished in Belgian domestic law.
In recent years, Belgian case-law has ruled overwhelmingly in favour of taxpayers in this respect, including the Court of Cassation on 16 June 2017. According to the Supreme Court, Belgium is required to grant a minimum tax credit (the "QFIE"; “FBB”) for dividends of French origin.
Following this judgment, as well as other judgments rendered by several Courts of Appeal, the tax authorities had announced that they were waiting for the outcome of another pending appeal to the Supreme Court on this matter.
In a recent decision of 15 October 2020, the Court once again confirmed its case-law. To the best of our knowledge, the tax authorities have not yet stated their position following this new decision of the Court of Cassation. However, all the lights are green and there is a strong chance that the tax authorities will – finally – concede their defeat.
If you received foreign dividends, we therefore advise you to check whether a tax saving cannot be obtained by means of a foreign tax credit based on a double taxation treaty (as it is currently the case for instance for those concluded with France, Italy or Israel). If you are in this situation, you can safeguard your rights, including for the past. This can be done by filing a tax complaint (if the time limit for filing a complaint has not yet expired) or by applying for ex officio tax relief. In the latter case, you can go back up to 5 years, i.e. request reimbursement of the taxes assessed up to the end of 2016.
