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Belgium before the Court of Justice of the European Union for tax exemption savings account

by AI | 29.Jul 2024 | Europe in brief AI

The European Commission is taking Belgium to the European Court of Justice in two cases. It concerns the tax exemption of savings accounts and the treatment of foreign developers.

The European Court of Justice in Luxembourg. Photo: Arne Immanuel Bänsch/dpa

BRUSSELS – The European Commission is turning to the European Court of Justice to challenge the tax exemption on savings accounts in Belgium. The Commission had already issued two warnings for this earlier.

Interest on savings accounts in Belgium is exempt from withholding tax up to 1,020 euros. In October 2020, the European Commission launched an infringement procedure for this. The Commission reasoned that, because the conditions for this tax exemption are so specific, foreign banks cannot compete with Belgian ones. This goes against the free movement of services. Interest on foreign savings accounts should also be exempted. 

Belgian federal finance minister Vincent Van Peteghem, a Christian Democrat, requested advice from the Belgian National Bank and the financial watchdog FSMA at the end of 2022, but the regime has not changed so far. In his blueprint for a tax reform, Van Peteghem proposed in the past legislature to introduce a general exemption for all income from assets, but the government of Prime Minister Alexander De Croo did not find an agreement on this. After two warnings, the European Commission is now also turning to the European Court of Justice, the EU’s executive body announced on Thursday.

Belgium must also represent itself in another case before the European Court of Justice. Belgium requires a 100 percent financial guarantee from project developers not recognized in Belgium, while for entrepreneurs in their own country it is only 5 percent. This makes it “excessively difficult” for foreign developers to enter the Belgian market, the Commission believes.

25/07/2024