The EU Commission has formally asked Belgium to amend provisions of its tax legislation relating to the taxation of dividends. In Belgium, dividends on quoted shares are subject to a reduced rate of withholding tax with the exception of dividends on shares quoted on a foreign stock market issued before 1 January 1994. In addition, the first tranche of dividends or interest paid by cooperative societies or those pursuing a social objective which are authorised in Belgium are exempt from capital gains tax with no corresponding exemption for equivalent foreign societies.

According to the Commission, these discriminations impose a heavier tax burden on investors established in Belgium wishing to invest their capital in other Member States and are contrary to the free movement of capital established by the treaties.

The Commission's request takes the form of a reasoned opinion (which constitutes the second stage in the infringement procedure). If there is no satisfactory reply within two months, the Commission may decide to refer the Kingdom of Belgium to the Court of Justice of the European Union.

For full details see http://europa.eu/rapid/press-release_MEMO-12-794_en.htm