Belgian Net Asset Tax and Withholding Tax: opportunities to reclaim for Luxembourg SICAV

Written by Patrice Delacroix 5 February 2019


In a decision dated 29 November 2018, the Court of Appeal of Brussels concluded that the Double Tax Treaty concluded between Belgium and Luxembourg (hereinafter the ‘DTT’) prevents the application of the Belgian Net Asset Tax (hereinafter the ‘NAT’) to a Luxembourg SICAV. As it confirms that a Luxembourg SICAV falls within the personal scope of the DTT, this decision may also have implications in terms of benefiting from the reduced WHT rates on dividends and interest provided by the DTT.

In a nutshell

Article 22 of the DTT provides that, unless in specific circumstances (real estate, ships, etc.), wealth can only be taxed in the Residence State. Some years ago, a Luxembourg SICAV decided to rely on this provision and successfully challenged the application of the Belgian NAT in front of the Tribunal of First Instance of Brussels. The judgement was appealed and the Court of Appeal of Brussels decided to question the European Court of Justice on the compatibility of the Belgian NAT with the EU law, without success.

Nevertheless, the Court of Appeal of Brussels still had to decide on the arguments based on the DTT, which it did in a decision issued on 29 November 2018. In particular, and without going into all the details, the Court of Appeal of Brussels concluded that (i) a Luxembourg SICAV falls within the personal scope of the DTT (art. 1) and that (ii) the Belgian NAT is comprised within the taxes covered by the DTT (art. 2); confirming at the same time the judgement of the Tribunal of First Instance of Brussels which condemned the Belgian State to reimburse the Belgian NAT disputed.

Key takeaway

Even though the Belgian State may still file an appeal before the Supreme Court, Luxembourg SICAV which have supported Belgian NAT may consider filing a refund request, at least in order to protect their rights. Given the applicable statute of limitations, such refund request may cover the Belgian NAT paid since 2015 if it is filed before the end of the year.

Furthermore, Luxembourg SICAV which have supported Belgian WHT on Belgian-sourced dividends or interest may also rely on this case law – especially the confirmation that Luxembourg SICAV fall within the personal scope of the DTT – to request the refund of the Belgian WHT exceeding the reduced WHT rates provided by the DTT. Here too, such refund request may cover the exceeding Belgian WHT supported since 2015 if it is filed before the end of the year. Note that the registration (or not) for public offering in Belgium is as such not relevant.

Assistance

PwC has an important experience and expertise on these matters, including in the framework of refund requests. Of course, we also remain at your disposal to provide further information on our assistance and/or accompany you in order to identify potential opportunities.