Tax Treaty Case Law around the Globe 2024

2.1. Introduction

Beginning on 1 January 2004, the Belgian annual tax on undertakings for collective investment (UCIs) also applied to foreign UCIs that market their products in Belgium. However, if the Belgian annual tax on UCIs (hereafter, Net Asset Tax (NAT)) is considered a tax on capital under a tax treaty, Belgium is precluded from applying the NAT to UCIs established in the other contracting state, given that most of the tax treaties entered into by Belgium allocate the taxing power of such a tax only to the taxpayer’s state of residence (cf. article 22 of the Organization for Economic Co-operation and Development (OECD) Model Tax Convention). There is varying case law on whether the Belgian NAT is considered a tax on capital for treaty purposes. Lower courts have held that the Belgian NAT is a tax on capital within the scope of the Belgium-Luxembourg Tax Treaty (1970) and the Belgium-Netherlands Tax Treaty (2001). In 2022, the Belgian Cour de Cassation/Hof van Cassatie (Supreme Court) ruled that the Belgian NAT is a tax on capital within the scope of the Belgium-Netherlands Tax Treaty (2001), but not within the scope of the Belgium-Luxembourg Tax Treaty (1970), based on a di...