Existing Exemption: Public Investment Companies.
As a recall, Art. 106, §7 of the Royal decree implementing the Belgian income tax code provides for a general withholding tax exemption on dividends distributed to non-resident investors by Belgian public investment companies (including real estate investment companies since the Royal decree of 27 December 2012), insofar those dividends do not stem from Belgian source dividends.
The exemption is thus subject to the two following cumulative conditions:
- The exemption of withholding tax applies to beneficiaries qualifying as so-called “non resident investors”, i.e. foreign individuals or entities which do not invest their moveable funds in a professional activity exercised in Belgium (i.e. when the funds are not allocated to a Belgian establishment).
- The exemption only applies to the extent the dividends distributed by the Belgian public investment companies do not stem from Belgian source dividends.
Extended Scope: Institutional Investment Companies.
The Royal Decree of 30 April 2013 extends the existing exemption to dividends paid out by Belgian institutional investment companies.
Entry into Force.
This extension is applicable retroactively to dividends paid out as from 1 January 2013.
This new tax provision is an additional step towards the positioning of Belgium as a top location for tailor-made solutions for institutional investors such as a pooling and securitizations.