European Commission - Press release
Taxation: European Commission asks Belgium to revise its taxation of property income from abroad
Brussels, 22 March 2012 – The European Commission has officially asked Belgium to amend the way it taxes property income from sources outside Belgium.
Belgian tax legislation provides for distinct ways of assessing income from property assets. Income from abroad considered for the purposes of taxation is assessed at around 50% of the market value, whereas domestic property income is assessed by another method, giving a lower level of around 20-25% of the market value. The Commission regards this practice as discriminatory and contrary to European Union legislation (Article 63 TFEU), which prohibits in principle all restrictions on the movement of capital between Member States and between Member States and third countries.
The Commission has officially asked Belgium to amend its legislation within two months. This request took the form of a ‘reasoned opinion’, which constitutes the second stage of infringement proceedings. In the absence of a satisfactory response within this time-limit, the Commission may refer Belgium to the EU Court of Justice.
The Commission is not criticising Belgian tax policy on the assessment and taxation of the income of Belgian residents deriving from property assets located in Belgium. That is a strictly domestic matter. Where no harmonising measures exist, Member States are free to legislate on the basis of their policy choices. What raises a problem in terms of compliance with fundamental freedoms is the fact that the method for determining the level of property income from abroad for tax purposes is less favourable than that applied for equivalent income deriving in Belgium. Belgium is, of course, free to choose whatever measure it sees fit in order to put an end to this situation, providing it actually does so.
For the press releases issued on infringement proceedings in the area of taxation or customs see:
For more information on EU infringement procedures, see MEMO/12/200
For the most up-to-date general information on the infringement proceedings initiated against Member States, see: