Capital gains on shares of investment companies


Capital gains on shares of investment companies: capitalising shares v. distributing shares

Judgment of the Constitutional Court of 28 May 2015 (ref. 75/2015)

At issue

The question relating to Articles 192 and 203 of the Income Tax Code of 1992 (ITC 92) raised by the Court of First Instance of Brussels.

The question reads as follows (free translation) “Do Articles 192 and 203 ITC 92 observe the principles of equality and non-discrimination enshrined in Articles 10, 11, 170 and 172 of the Constitution by excluding, from corporate tax exemption, the capital gains realised on capitalising shares of SICAVs/BEVEKs as opposed to distributing shares of SICAVs (combination of Articles 192, §1 and 203, §1 and §2 ITC 92)?”

In other words, is it justified to tax capital gains on capitalising shares of SICAVs but to exempt capital gains on distributing shares of SICAVs (complying with the conditions to qualify as a “SICAV-RDT/DBI-BEVEK”)?

The Constitutional Court considers that the difference in treatment is justified.