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European Commission - Press release

Taxation: The European Commission requests Belgium to amend its rules on the notional interest deduction

Brussels, 26 January 2012 – The European Commission has officially asked Belgium to amend its legislation on the notional interest deduction. Current Belgian rules provide that a notional interest deduction is granted for Belgian real estate and permanent establishments, while no deduction is granted for foreign real estate and permanent establishments.

The Commission considers that this is contrary to EU rules as laid down in the Treaty on the Functioning of the European Union (TFEU). The freedom of establishment (Articles 49 and 54 TFEU) prohibits the exclusion of foreign permanent establishments, and the free movement of capital of (Article 63 TFEU) prohibits the exclusion of foreign real estate. It should be noted that the Commission does not challenge the notional interest deduction as such, only its discriminatory application. Notional interest is fictitious interest on own assets. Belgium allows to deduct such interest to take into account the risk of investing own assets in a business activity.

The request takes the form of a reasoned opinion which is the second stage of an infringement procedure. If the rules are not brought into compliance within two months, the Commission may refer the matter to the Court of Justice of the European Union.


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/12/42.

For the most up-to-date general information on the infringement proceedings initiated against Member States, see:

Contacts :

Emer Traynor (+32 2 292 15 48)

Natasja Bohez Rubiano (+32 2 296 64 70)

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