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30Jun

Capital Gains on Shares (Article 90, 9° ITC92) – Not Compatible with EC Treaty

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As you may know, a capital gain tax of 16,5% ( to be increased by local taxes) is due on capital gains realised on the sale of shares of a Belgian resident company when the buyer is a non resident legal entity and the seller (or his legal antecedent) alone or together with his spouse or his descendants, ascendants or collateral relatives up to the second remove, hold more than 25% of the Belgian resident company directly or indirectly at any point in time in the five year period preceding the sale (article 90, 9° of the Belgian Income Tax Code 1992).

The Court of First Instance of Antwerp in its decision of June 13, 2003 referred to the European Court of Justice for a ruling concerning the compatibility of the European Union treaties with this Belgian tax imposed on capital gains.

News

The European Court of Justice in its decision of June 8, 2004 decided that article 90, 9° of the Income Tax Code 1992 is not compatible with European Union treaties. It is not yet known whether the Belgian Income tax Code will be amended to comply with European Union treaties.

Posted: June 30th, 2004