Context

As a rule, dividend income whether of Belgian or foreign source is taxable if received by Belgian resident taxpayers. Dividend income includes stock dividends (i.e. dividend that are paid in stocks). However in their practice note (Com.IB/Com.IR 18/22), the Belgian tax authorities stated that foreign source stock dividends did not constitute dividend income.

News

The above tax concession has now been abolished and the tax treatment of foreign source stock dividends has been clarified in a new practice note (Ci.RH.231/527.270 (AFER 7/2003) dd. 04.04.2003, see links below) recently issued by the Belgian tax authorities.

As a result, the beneficiary of foreign source stock dividends will be obliged to report the dividends in his Belgian personal income tax return ( after deduction of foreign withholding, if any) if there was no Belgian withholding tax (roerendvoorheffing/précompte mobilier) at source. If the foreign stock dividend is paid through a Belgian financial intermediary, it will be subject to the aforesaid withholding tax.

Administrative circular:
French: http://news.hrservices.be?lk200306041
Dutch: http://news.hrservices.be?lk200306042