Belgian Supreme Court Upholds Tax Treaty Precedence Over Domestic Law

The Belgian Supreme Court recently confirmed that Belgian tax authorities cannot hide behind the text of the domestic law to deny Belgian taxpayers the benefit of the Belgium-France tax treaty. (1971 protocol; 1999 protocol; 2008 protocol; 2009 protocol.)

The case is a classic example of double taxation of dividends. French dividends are taxed at source at a reduced rate of 15 percent, and the net dividends are taxed again in Belgium upon their distribution to a Belgian resident. The income tax treaty grants taxpayers a foreign tax credit, which the Belgian tax authorities refuse to honor.

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