Brussels, 21 December 2006
The Belgian income tax law provides that donations to charities are tax deductible, on condition that the charities are established in Belgium. Donations are capital movements, on the basis of the nomenclature of Council Directive 88/361/EEC. The condition that the charities are established in Belgium is contrary to the free movement of capital, guaranteed by Article 56 of the EC Treaty. This was confirmed by the European Court of Justice in its ruling on Stauffer, Case C-386/04 of 14 September 2006.
In reply to the letter of formal notice that the Commission sent earlier Belgium acknowledged the infringement, but it did not indicate when and how it would eliminate it, nor how it would apply EU law in the period before the new rules would enter into force. The Commission has therefore decided to move to the second stage of the infringement procedure.
The Commission's reference number of this case is 2005/5062.
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