The European Commission has formally requested Belgium to change the provision of the Inheritance Tax Code of the Brussels Capital Region which provides for a reduced rate applicable to taxation of gifts of real estate in the Brussels Capital Region because to qualify, the person has to live in Brussels for at least five years. The Commission considers such provisions to be incompatible with the freedom of residence, the free movement of workers and the right of establishment as provided for by the Treaty.

The Brussels Inheritance Tax Code provides for a reduced tax rate for gifts of real estate within the Brussels Capital Region if the recipient remains a resident of the Brussels Capital Region for at least 5 years. In the Commission's view such provisions could dissuade Belgium's residents from moving or investing in other Member States. The Commission therefore does not see any justification for such a restriction.

Full details are available at http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/159&format=HTML&aged=0&language=en&guiLanguage=en