The European Commission has formally requested Belgium to remove what it calls, discriminatory provisions in its inheritance tax laws and company tax laws.

Brussels and Walloon tax laws on inheritances of shares allows for a choice between several share prices to determine the taxable value for inheritance tax purposes. This choice only applies to shares listed on the Belgian stock exchange while shares listed on stock exchanges outside Belgium can only be valued based on foreign stock market value. The Commission considers that excluding the shares listed on other EU and EEA stock exchanges is discriminatory and constitutes an unjustified restriction on the free movement of capital.

Belgian legislation also grants a tax credit on business profits of up to €3,750 euros per year. However, non-residents earning profits through a Belgium permanent establishment are excluded from this tax credit. The Commission is of the opinion that this exclusion is discriminatory and constitutes an unjustified restriction on the freedom of establishment. This situation may result in foreign businesses earning profits in Belgium through a permanent establishment being taxed more than Belgian businesses.

The Commission's requests take the form of reasoned opinions (second step of EU infringement proceedings). If the Commission is not satisfied with Belgium's response, which must issue within two months, the Commission may refer Belgium to the Court of Justice of the European Union.

For full details see http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/408&format=HTML&aged=0&language=en&guiLanguage=en