Tax Treaty Case Law around the Globe 2018

S. 51Chapter 6 Belgium: Interpretation of Tax Treaties – The Interaction between Domestic Law and Treaty Law

Anne Van de Vijver

6.1. Introduction

This contribution discusses a case adjudicated by the Belgian Supreme Court (Hof van Cassatie/Cour de Cassation) on 16 June 2017. The case concerns the interpretation of treaties, more specifically the interpretation of tax treaty provisions that refer to domestic law. The Supreme Court dealt with the question to what extent changes in domestic law also affect such treaty provisions. It concerns an intertemporal problem of interpretation. The Belgium-France Income Tax Treaty (1964) (hereinafter Belgium-France treaty) eliminates international double taxation of dividends by providing a foreign tax credit (FTC) that is deductible under conditions fixed by Belgian law. In the present case, however, at the time the tax was imposed, the Belgian legislator had abolished this domestic FTC. The question was whether reference should be made to domestic law in force at the time the tax was imposed (i.e. no FTC available) or whether the taxpayer could still benefit from an FTC based on the treaty. The answer to this question should be guided by the good fai...