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Brussels, 6 April 2011

Taxation: Commission formally requests Belgium to change its law on taxation of capital gains

The European Commission has formally requested Belgium to amend its rules concerning the taxation of capital gains because they discriminate against assets outside Belgium and so breach basic EU Single Market rules (freedom of establishment, freedom to provide services and free movement of capital). The Commission's request takes the form of a "Reasoned Opinion" (second step of EU infringement proceedings). In the absence of a satisfactory response within two months, the Commission may refer Belgium to the EU's Court of Justice.

Under the Belgian Income Tax Law, capital gains on fixed assets such as buildings, equipment or machinery are not immediately taxed if a reinvestment is made in assets used in Belgium. However, such a rule does not apply if the reinvestment is made in assets used outside Belgium. In this case, capital gains are immediately taxed. As a consequence, companies cannot benefit from delayed taxation on capital gains if they invest in assets in other EU or EEA countries.

The Commission considers these rules to be incompatible with EU rules on the freedom of establishment, the freedom to provide services and the free movement of capital (Articles 49, 56 and 63 of the Treaty on the Functioning of the European Union and Articles 31, 36 and 40 of the European Economic Agreement).

For press releases on infringement cases in the taxation or customs field, see:

For the latest general information on infringement measures against Member States see:

For more information on EU infringement procedures, see MEMO/11/220.

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