Foreign Tax Credit (QFIE/FBB) System not Compliant to Belgian Constitution



The Court examines two aspects of the legislation, (1) the possible refund of FTC in case of insufficient taxable profits and (2) the gross-up of the FTC to the corporate tax base (link to decision FR/ NL).

1. Excess FTC (article 285 and 292 ITC)

Under domestic law, a foreign tax credit excess may not be reimbursed and neither be carried forward. This may be the case when there is a negative corporate tax base. This adverse tax effect is not in conflict with the Constitution.

2. Gross-up of the FTC to the corporate tax base (article 37 ITC)

Under domestic law, the foreign tax credit has to be added to the corporate tax base. To the extent the foreign tax credit has not been actually credited against tax due, the tax provision of article 37 ITC implying a gross-up of the FTC is not compatible with the Constitution.


Companies which were not in the position to fully credit the FTC in past years should assess the opportunity to file claims further to this decision.