CJEU – Recent Developments in Direct Taxation 2017

1. S. 13The Wereldhave Case (C-448/15)

1.1. Introduction

In its judgment of 8 March 2017, the Court of justice decided on a request for preliminary ruling lodged by the Brussels Court of Appeal concerning the application of the Parent-Subsidiary Directive – and the application of the treaty freedoms. The case concerned a dividend distribution by a Belgian real estate investment fund (société d'investissement à capital fixe immobilière, SICAFI/ vastgoed beleggingsvennootschap met vast kapitaal) to its shareholders, two Dutch Real Estate Investment Trusts (REITs) that benefitted from the so-called FBI-regime (Fiscale Beleggingsinstellingen) for Dutch income tax purposes.

1.2. Facts and legislation

1.2.1. The Belgian withholding tax exemption on dividends

Article 106, § 5 of the Royal Decree implementing the Belgian Income Tax Code (RD/BITC) as applicable at the relevant time (1999) provides that no withholding tax is levied on dividends distributed by a Belgian subsidiary to its parent company resident in another Member State. This exemption is subject to two cumulative conditions: