Belgium: Interest on foreign regulated savings deposits exempt from individual income tax (court decision)
Interest earned on foreign regulated savings deposits held with a credit institution established in EEA is exempt from Belgian individual income tax
Exempt from individual income tax (court decision)
The Court of Cassation (Hof van Cassatie) held that interest earned on foreign regulated savings deposits held with a credit institution established in the European Economic Area (EEA) is exempt from Belgian individual (personal) income tax.
Natural persons in Belgium benefit from a tax exemption on the first €980 (for 2022) in interest received on a “regulated savings deposit,” and interest above that limit is taxed separately at a favorable rate of 15% (instead of the standard rate of 30%). In principle, foreign savings deposits also benefit from this favorable regime, but only if a taxpayer can demonstrate that the savings deposit (1) is “regulated” by a competent government body (equivalent to the National Bank of Belgium or the Belgian Financial Services and Markets Authority) and (2) meets the analogous conditions that Belgian savings deposits must also meet in order to qualify for the exemption. The tax authority has strictly interpreted those conditions such that few foreign savings deposits have qualified for the favorable treatment.
However, the courts have applied a less restrictive interpretation of the conditions, as reflected in the decision of the Court of Cassation. In particular, the courts have not necessarily required the existence of a double renumeration structure in order to find that a foreign savings deposit qualifies for the favorable treatment.
Read a November 2022 report (Dutch) prepared by the KPMG member firm in the Netherlands
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