Belgium's Finance Minister has confirmed that foreign shareholders can use their own internationally recognised accounting standards—including US GAAP and UK GAAP—to demonstrate compliance with the new financial fixed asset requirement for dividend withholding tax exemption, removing a key barrier for non-resident investors seeking relief from the 30% withholding tax on Belgian dividends.
Following parliamentary questions, the Belgian Minister of Finance has provided clarification on the financial fixed asset condition for applying the Tate & Lyle dividend withholding tax exemption (the exemption) for dividends paid to non-resident substantial shareholders.
New condition effective 29 July 2025
The Programme Law of 18 July 2025 introduced an additional requirement for dividend withholding tax exemption on distributions made from 29 July 2025 onwards. Under the new rule, shareholdings with a minimum acquisition value of EUR 2,500,000 must qualify as “financial fixed assets” in the hands of the recipient company. This condition applies specifically to shareholders who do not meet the criteria for small companies under Belgian company law.
Belgium introduced the exemption following the European Court of Justice’s Tate & Lyle Investments decision, which found that EU member states must grant relief from economic double taxation on dividends paid to companies in other member states. The exemption covers participating interests below 10% but valued at least EUR 2,500,000, held by companies established in the EU, European Economic Area, or treaty countries with information exchange provisions. Without the exemption, a 30% withholding tax generally applies.
Foreign shareholders may use international accounting standards
The Minister’s response on 25 March 2026 confirmed that foreign corporate shareholders can rely on internationally recognised accounting standards they normally apply when determining whether their shareholding qualifies as a financial fixed asset. This includes EU Directive 2013/34/EU, IFRS 10, and domestic systems such as US GAAP or UK GAAP.
This clarification removes uncertainty for international investors, who previously faced challenges applying Belgian accounting principles. Foreign shareholders need only demonstrate that their Belgian shareholding meets the financial fixed asset definition under their own accounting framework to qualify for the exemption, provided all other conditions are satisfied.
The Minister also noted that for investment companies holding participations as their core activity, minority stakes can qualify as financial fixed assets if held for generating recurrent income rather than short-term gains. Indicators of the necessary holding intent include involvement in strategic decisions, significant shareholder group positioning, and active participation in general meetings.
