Belgian Net Asset Tax before the Court of Justice of the EU – AG’s Opinion released


According to the Advocate General’s opinion issued on 21 January 2016, the Belgian Net Asset Tax applied to foreign investment funds is compatible with European law.


The Court of Justice of the European Union (CJEU) was requested, by the Court of Appeal of Brussels, to grant a preliminary ruling on the compatibility, with European law, of the Belgian Net Asset Tax (NAT) as applicable to non-Belgian undertakings for collective investments (UCIs) marketing their units in Belgium (SPF Finances v. ING International SA; Case C-48/15).

On 21 January 2016, the Advocate General (AG) delivered his opinion. Two points to consider are:

1) The AG first analyses whether levying the NAT on non-Belgian UCIs is contrary to (i) the EU fundamental freedoms (in particular the free movement of capital), (ii) Directive 69/335/EEC of 17 July 1969 concerning indirect taxes on the raising of capital and (iii) Directive 85/611/EEC of 20 December 1985 (UCITS Directive). In that regard, the AG recommends the CJEU to conclude that these EU provisions do not preclude the levying of the NAT.

2) The AG then also addresses the specifically harsh sanction provided in the NAT legislation, namely the prohibition of non-Belgian UCIs from continuing to market their units in Belgium when they fail to submit their tax declarations or pay the tax in a timely manner. As this sanction is only applicable to non-Belgian UCIs and not to Belgian UCIs, the AG considers that this sanction constitutes a direct discrimination precluded by the freedom to provide services. It should be noted that the Act of 18 December 2015 (Belgian Official Gazette of 28 December 2015) has already abolished this sanction (which had never been applied anyway) so that the outcome of the CJEU case should not have any practical consequences.

Irrespective of the outcome of the case before the CJEU (which usually follows the AG’s opinion), the Court of Appeal of Brussels still has to decide on the question whether the Belgian NAT infringes the provision of the Belgium-Luxembourg double tax treaty (DTT). As a recall, the Court of First Instance decided in 2011 that the Belgium-Luxembourg DTT indeed prevents Belgium from levying ‘wealth tax’ (such as the Belgian NAT) on Luxembourg UCIs. The Court of Appeal will have the last word on this question.

The game is not over yet. Awaiting the final outcome, Luxembourg and other foreign UCIs (established in DTT countries) can still envisage safeguarding their rights for recovery of the NAT.