The Commission has formally asked Belgium to end the discriminatory treatment of non-residents working in the Flemish Region and the discriminatory treatment concerning the interest paid to other Member States’ financial institutions. These requests take the form of reasoned opinions. If there is no satisfactory response within two months, the Commission reserves the right to refer these matters to the Court of Justice of the European Union.

Under Belgian legislation, a flat-rate tax reduction is granted to residents of the Flemish Region. By contrast, this is not granted to persons resident in another Member State, even if they work in the Flemish Region and earn all or virtually all of their income there.

The Commission considers reserving the reduction only for residents of the Flemish Region, whatever their nationality as discrimination against non-residents.

Belgian legislation authorises the deduction as professional expenses of interest paid only in so far as they do not exceed an amount corresponding to the market rate. This deduction is nevertheless possible where the interest is paid to Belgian financial institutions.

The Commission views such restrictions as a contravention of freedom to provide services (Article 56 TFEU) and the free movement of capital (Article 63 TFEU).

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