ECJ puts brakes on Belgian savings accounts

The European Court of Justice (ECJ) considers that the tax exemption, which Belgian savings accounts enjoy, breaches European law.

This is per a ruling given yesterday (Thursday) reported in Le Soir, L’Echo and De Tijd in their Friday editions. L’Echo notes that millions of euros may be at stake.

The ECJ considers that the tax exemption (withholding tax on interest) for Belgian savings accounts is a barrier to the principle of free movement of services, under the EU treaties. The ECJ is targeting the interest payment structure, which takes the form of a base rate and loyalty bonus for Belgian savings accounts, as foreign banks cannot offer Belgian customers investments which enjoy this tax exemption.

Belgium had been penalised on the same grounds in 2013. Individual account holders outside Belgium may now have a remedy against foreign banks, by invoking this ruling, to demand repayment of withholding tax collected by several banks over a number of years. If Belgium does not modify its legislation, the European Commission may launch infringement proceedings against it.

The department for the Minister of Finance, Johan Van Overtveldt (New Flemish Alliance), “takes note of the ruling” but indicates that “the court’s ruling on the question referred to it is not yet final and binding.” There is “therefore no binding judgement against Belgium at this stage, given that a Belgian judge has yet to consider the issue.”

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