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Belgium: Annual Tax on Collective Investment Vehicles and Insurance Companies - Constitutional Court annuls retroactive tax increase of 2013

Annulment retroactive tax increase

Belgium imposes an annual tax on Belgian and foreign collective investment vehicles if they are registered with the Belgian regulator FSMA and have Belgian share- or unitholders. The tax base is linked to the fund's net asset value. Up to 2013, the general tax rate of the Belgian annual tax on collective investment vehicles (Annual Tax) was 0,08%.

The Law of 17 June 2013 set, in its Article 106, this general tax rate at 0,0965% as of 1 January 2013 (i.e. assessment year 2013) and slightly lower (0,0925%) as of 1 January 2014 (from assessment year 2014 onwards). However, according to the regime regarding the Annual Tax, the tax return for assessment year 2013 (= net assets per 31 December 2012) already had to be filed, and Annual Tax already had to be paid, as early as 31 March 2013. In other words, the rate increase by Law of June 2013 occurred at a time when the tax already should have been paid. That the Belgian legislator was aware of this issue appears from the fact that the law provided that payment by 30 September 2013 was deemed to be timely (i.e. 31 March 2013).

The retroactive rate increase was strongly criticized. Taxpayers sought relief with the Belgian Constitutional Court arguing that the retroactive tax rate increase infringed the Belgian constitution.

By decision of yesterday (22 January 2015), the Belgian Constitutional Court annulled that part of Article 106 of the Law of 17 June 2013 that contained the retroactive tax rate increase for assessment year 2013.

Next Steps

Following the positive decision of the Constitutional Court, funds that paid Annual Tax in assessment year 2013 can claim a refund of that part of Annual Tax that relates to the annulled retroactive tax rate increase (i.e. 0,0165% of the tax base). Although the decision strictly speaking only concerns the annual tax on collective investment vehicles, the retroactive increase of the rate for the other taxes (such as the annual tax on insurance companies) was also annulled. A valid refund request can be filed within a five-year period, starting on 1 January of the year in which the tax liability arose (= assessment year), i.e. until 31 December 2017.


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Jos Goubert

Tax Knowledge Dept.

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