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Tax Reclaims on Belgian Securities

Acupay will process any reclaims and file them with the Belgian tax authorities directly on the investors’ behalf. We will oversee the complete process until the excess withholding tax has been reclaimed. Acupay will process any DTT claims as well as claims based on domestic law. Acupay’s Belgian long form reclaim solution can be used for instance for:

  • beneficial owners that have been taxed at the statutory rate and are a tax resident in a Double Taxation Treaty (DTT) country;
  • beneficial owners that are non-resident pension funds and eligible for tax exemption under Belgian domestic laws. For dividends paid before 1 January 2013, not only pension funds but all eligible non-for-profit tax exempt entities could benefit from this exemption;
  • beneficial owners that are non-resident investment companies and eligible for a reduced tax rate under EU law.

Requests for tax relief via long form reclaim can be submitted to the Belgian tax authorities until the statute of limitations expires. In Belgium, this means investors have until the end of the 5th year after the payment date. As the Belgian Tax Authorities enforce a strict rule to the Statute of Limitations it would be prudent to submit all required documentation to Acupay at least 6 weeks prior to the Statute deadline. The estimated time for receipt of refund amounts is 12 to 18 months.

News

24 May 2014: Clarification on Statutory Deadline for Long Form Reclaims

Based on confirmation received from our local depository, the statutory deadline for reclaiming tax over-withheld at source on Belgian securities depends on the date on which the payment took place and the tax amount withheld at source was transferred to the Belgian Treasury. According to the law provisions, the deadlines are as follows:

  • For payments made after 1 January 2011: five years as of 1 January of the year in which the tax withheld was remitted to the Belgian Treasury. Example: payment of 15 March 2011 – deadline 31 December 2015; and
  • For payments made before 1 January 2011: five years as of 1 January of the year following the year in which the respective payment took place. Example: payment of 15 March 2010 – deadline 31 December 2015.

Background

On 28 December 2011, the new Article 368 of the Belgian Income Tax Code redefined the rule with respect to the statute of limitations for reclaims of unduly paid withholding tax. This new tax provision, which applies for withholding tax paid to the Belgian Treasury from 1 January 2011, provides for a statute of limitations of five years, starting from 1 January of the year in which the withholding tax was remitted.This new rule replaces the one commonly applied before on the Belgian market, which used to refer to a statute of limitations of five years starting on 1 January of the year following the year of the payment of the revenue, on the basis of Article 376 of the Belgian Income Tax Code.The Circular Letters published this year, after Belgium’s condemnation by the EU Court of Justice in the Aberdeen and Tate & Lyle cases, indicate that the Belgian Tax Authorities put the deadline for claiming the withholding tax unduly paid before 1 January 2011 at five years. Although the Circular Letters provide references that give the legal grounds for this five-year statute of limitations, the date as from which the five-year period is deemed to start is not provided precisely. However, market participants may expect the Belgian Tax Authorities to adopt an approach similar to the rule applied for withholding taxes paid as from 1 January 2011.We take this opportunity to remind customers that, if the aforesaid five-year statute of limitations has already elapsed, non-resident investors might have to consider using arguments to defend the application of a longer (for example, 10-year) statute of limitations. As mentioned above, however, the Belgian Tax Authorities do not seem to adhere to this position in the Circular Letters recently published. It may therefore be that discussions regarding the validity of a reclaim filed on the basis of a longer statute of limitations would need to be brought before the Belgian courts.

Impact on customers

We strongly recommend customers, for the sake of safety, to file all reclaims (regardless of whether the payment took place before or after 1 January 2011) taking into account the more conservative approach, on the assumption of a five-year statute of limitations starting from 1 January of the year in which the withholding tax was remitted.