On September 28, 2018, the Belgian Council of Ministers approved a preliminary draft bill focusing on combating withholding tax evasion and avoidance in the event of an unjustified exemption or refund.
The draft tax bill includes the following measures:
- If a Belgian or foreign pension fund who receives dividends which are exempted or refunded from the withholding tax and the fund has held the securities related to such dividends for less than 60 days, there should be a presumption that the legal transaction or the whole transactions related to the dividends are artificial. The pension fund will have to prove that the legal transaction is not artificial or such dividends are entitled to the exemption of withholding tax.
- The beneficiary of the dividends, interests and royalties will be designated as the debtor of the withholding tax if an unlawful exemption from withholding tax or a refund of withholding tax has been applied.
- The taxpayers must already have the full ownership of the underlying securities from the date on which the beneficiaries of the dividends are identified (i.e. one day before the current scheduled date, the time of allocation or payment of the dividends) to be able to apply the settlement of securities transactions in order to counter undue settlement of withholding tax on dividends.
The preliminary draft will be submitted to the Council of State for advice.
Source: Residence Palace