For recall, on 1 March 2018, the Constitutional Court annulled the Fairness Tax but decided to maintain its effects for the assessment years 2014 to 2018, except in case of redistributions of dividends (see our newsflash in this respect).
On 3 September 2018, the Belgian tax administration released a Practice Note commenting the content and the consequences of the Constitutional Court’s decision. It also gives further details (and an example) on how the refund of the Fairness Tax linked to redistributions of dividends should be computed and evidenced by the taxpayers concerned. In this respect, the Belgian tax administration also specifies (as an administrative tolerance) that (re)distributions between Belgian companies are also concerned, which is welcome.
Some aspects of this Practice Note can however be criticised. For instance, one could regret the fact that the Belgian tax administration does not make a distinction between taxpayers which have a pending refund claim and the others. More importantly, as regards the situations not involving redistributions of dividends, the Practice Note suggests that a strict interpretation of the Constitutional Court’s decision would be followed, meaning that the refund claims concerned would not be accepted by the Belgian tax administration.
However, PwC does not agree with this approach and recommends the taxpayers concerned further investigating the consequences of the Constitutional Court’s decision on their specific situation in order to take the appropriate actions (supplementation of a refund claim, judicial appeal, etc.).
This is especially important as a filing position may need to be taken in the framework of the filing of the tax return for assessment year 2018, which is in most cases due by 27 September 2018. As a matter of example, it is questionable whether Belgian branches of foreign companies should declare the Fairness Tax in their tax return since the Constitutional Court acknowledged the impossibility to compute it.
PwC can of course provide its assistance in this framework.