Tax Treaty Case Law around the Globe 2017
1. Aufl. 2018
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S. 69Belgium: Transparent Entities: The Case of the French SCI under the Belgium-French Tax Treaty
Isabelle Richelle
1. S. 70Introduction
The tax regime applying to Belgian individual residents owning shares in a French SCI (Société civile immobilière) has been widely discussed in Belgium for many years, giving rise to a large number of cases as well as to doctrinal writing.
A further step occurred in September 2016 when the Belgian Supreme Court delivered a new judgment overruling an earlier decision it rendered in 2004.
The French SCI is an entity with its own legal personality. According to French law, the SCI which must have a ‘civil’ – i.e. non-commercial – objective, may opt not to be subject to corporate taxation. In that case, the profits of the company are taxed in the hands of the associates. The profit of the SCI is deemed to be attributed to its associates on the closing date of its annual accounts. The profits are determined at the level of the company; the tax is paid by the associates. At the level of the associates, the income qualifies as income from immovable property.
This is the so-called ”translucent” regime.
From a Belgian perspective, the question that arises from this kind o...