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E-tax flash - Law implementing Tate & Lyle judgment published in Belgian Official Gazette

Law implementing Tate & Lyle judgment published

The law has been published in the Belgian Official Gazette of 28 December 2015.


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The law of 18 December 2015 containing tax and miscellaneous provisions, which inter alia implements the ECJ decision of 12 July 2012 in the Tate & Lyle case into Belgian legislation, has been published in the Belgian Official Gazette of 28 December 2015.

In the Tate & Lyle case, the ECJ opposed the difference of treatment created by the possibility for resident companies to claim the dividends-received deduction (DRD) and to credit the withholding tax (WHT) on dividends from participations below 10%, but above 1,2 M EUR (at that time, currently 2,5 M EUR) against Belgian corporate income tax, whereas a non-resident company could not do so.

Even before the implementation legislation, taxpayers could in principle reclaim excess withholding tax based on the ECJ judgment. In a circular letter of 28 June 2013, the tax authorities had already provided some guidelines for the treatment of such claims.

The Belgian Income Tax Code has now been changed in order to comply with the judgment of the ECJ. Moreover, the rules have been extended to cover also companies resident in certain other states outside the European Economic Area (EEA) (see below). A movable withholding tax rate of 1,6995% is introduced for Belgian-sourced dividends paid to qualifying foreign companies. The rate of 1,6995% is the product of 5% (being the part of the dividend for which the DRD cannot be claimed) multiplied with the standard corporate tax rate (including additional crisis contribution) of 33,99%.

A particular situation arises where the foreign company is, in its state of residence, entitled to a credit for, or reimbursement of, Belgian withholding tax. In this case, the new tax rate of 1,6995% is applied only to a fraction of the dividend. Belgian withholding tax will thus be imposed in two “layers”, as is illustrated by the following example.



A foreign company with a participation of less than 10% but an acquisition value of more than 2,5 M EUR in a Belgian company receives a dividend of 100. The domestic Belgian withholding tax rate is 25%. The foreign company is entitled to credit 10 of Belgian withholding tax in its state of residence. Pursuant to the new law, Belgian withholding tax is applied at a rate of 1,6995% on 15/25 of the dividend (60), and furthermore at a rate of 25% on 10/25 of the dividend (40). Hence, total Belgian withholding tax amounts to 11,02 (1,02 + 10).

Conditions and attestation

The law introduces the following conditions for foreign companies to qualify:

  • The company is established either (i) in a member state of the EEA, or (ii) in a tax treaty country if the tax treaty or any other treaty provides for the exchange of information necessary to implement national legislation of the contracting states. 
  • The company has a legal form included in the EU Parent-Subsidiary directive or a similar legal form. 
  • At the moment of the distribution, the company has a participation of less than 10% but more than 2,5 M EUR. 
  • The participation has, or will be, held uninterruptedly in full ownership during at least one year.

The debtor of the WHT must also possess an attestation whereby the receiving company confirms the following:

  • Qualifying legal form 
  • Acquisition value amounts to at least 2,5 M EUR 
  • 1-year holding period has or will be fulfilled

The extent to which the receiving company is entitled to a credit or reimbursement of Belgian WHT in its residence state (confirmation to be based on the legal provisions on 31 December of the year preceding the dividend distribution).

The new rules apply as from 28 December 2015.

KPMG comments

It is expected that many discussions will arise about the proof of the extent to which credit or reimbursement for Belgian WHT can be obtained in the residence state. Furthermore, it is not free from doubt whether the new regime is an EU law-compliant implementation of the Tate & Lyle judgment. Please note that the excess dividend withholding tax paid in the past and for which the statute of limitation has not yet been expired (i.e. at least WHT paid as from 2012) can also be reclaimed under similar conditions as under the new law


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Tel.: +32 2 708 38 24  

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