Tax Treaty Case Law around the Globe 2023

1. Introduction

The two decisions of the Belgian Court of Cassation that will be analysed and commented on in the present contribution are of particular interest as they address the inclusion of special taxes on financial institutions in the material scope of Article 2 OECD MC.

The (preliminary) question of whether a tax in dispute is covered or not by Article 2 of the applicable DTC will, among other issues, determine the application of said DTC. An answer to this question will therefore strongly influence the allocation of the taxing powers of each contracting state. A positive answer (i.e. application of a DTC to the net asset tax [NAT]) to the previous question will compel the contracting states to comply with the distributive rules of the applicable DTC. Conversely, a negative answer (no application of the DTC to the NAT) will leave the existing taxing powers of the contracting states “untouched”.

Both decisions of the court of cassation relate to the same tax, specifically an annual tax on collective investment undertakings registered with the Belgian Financial Services and Markets Authority (formerly, the Belgian Banking, Finance and Insurance Commission) and are covered by the...