In a welcome development for anyone interested in EU tax competition matters, the Commission has decided not to sanction Belgium for its CIU tax regime.

In 2004, Belgium changed the basis for levying tax on collective investment undertakings to a system based on transactions carried out in Belgium. Previously the tax was levied on CIUs established in Belgium.

The complaint was that because units marketed abroad would escape Belgian tax under the new rules, this effectively constituted state aid for exports. The Commission found, however, that the new rules achieved their stated aim of introducing a level playing field for different investment products, notably units of Belgian and foreign CIUs, sold on the Belgian market. In this context it could not be seen as discriminatory, and the state aid rules did not apply.