• Does the Belgian Tax on Stock Exchange Transactions infringe EU law?

Does the Belgian Tax on Stock Exchange Transactions infringe EU law?

Bruno Orban, Senior Manager |

07 December 2018

As a recall, the Tax on Stock Exchange Transactions (“TOB / beurstaks”) has been extended, since 1 January 2017, to transactions effected by Belgian residents through financial institutions established outside Belgium.

As a consequence, Belgian investors have to file bimonthly tax returns and to pay the tax, with respect to the transactions carried out abroad. In contrast, Belgian investors are relieved of any tax obligations for transactions carried out in Belgium, as Belgian financial institutions are liable for the tax in this situation.

Based on this difference of treatment, a Belgian taxpayer contested the legality of the Tax on Stock Exchange Transactions before the Federal Constitutional Court: the applicant alleges that the additional tax obligations and tax liability for transactions effected outside Belgium infringe the free movement of services and the free movement of capital.

The Federal Constitutional Court ruled that the alleged infringements are serious and seeks a preliminary ruling from the Court of Justice of the European Union - decision nr. 149/2018 of 8 November 2018

As these proceedings may potentially lead to the abrogation of the Tax on Stock Exchange Transactions for transactions carried out outside Belgium, we will inform you on further developments.