The European Commission has referred Belgium to the ECJ on foot of claimed discriminatory practices concerning the taxation of collective investment undertakings (CIUs), under the Freedom of Movement rules.

According to the Commission, Belgian legislation allows a higher rate of tax on certain CIUs governed by foreign law established in other Member States of the EU or EEA while a lower rate is applied to similar CIUs established in Belgium. The Commission found this discriminatory practice to be a barrier to the free movement of financial services and capital in the single market.

September 2013 saw the Commission issue a reasoned opinion to Belgium asking that they amend the legislation in question. As Belgium has not changed this legislation, the Commission has now referred the matter to the ECJ. Stay tuned for updates to this story.

This will be of interest to those in the investment management industry, given the importance of Europe as a hub for asset management.