According to Belgian domestic law, movable income (interest/dividends) paid out by/via a Belgian tax resident (intermediary) is subject to a movable withholding tax or tax on investment income . This tax on investment income is the final tax due on this type of income. In other words, the beneficiary is no longer obliged to report this income in his annual Belgian income tax return. As a consequence, no additional municipal taxes are due.

If the movable income is paid out via a non-resident of Belgium, the latter cannot withhold the movable withholding tax. Therefore, and due to the fact that the beneficiary is obliged to report this income in his annual Belgian income tax return, additional municipal taxes will be levied.

The Court of Appeal of Antwerp has made a request for a preliminary ruling in this respect with the European Court of Justice, questioning whether this way of taxation is an infringement to the freedom of service offering. In the case at hand, the European Court of Justice has ruled that the above difference in tax treatment entails indeed such an infringement. Belgian resident taxpayers should not be treated differently depending on whether their investment income is paid out via a bank established in Belgium or in another EU country.