Belgium: Amendment to article 106 §§2 and 4 of the Belgian Royal Decree

The Belgian Tax Authorities have published a tax Circular in which they comment on tax amendments provided by article 106 §§2 and 4 of the Belgian Royal Decree.

This is further to our Announcement A13024, dated 13 February 2013.

The new Circular Letter Ci.RH.233/625.237 (available online in French and Dutch) aims at the wording that must be used in a fiscal certification on which eligible non-resident pension funds must certify their entitlement to the withholding tax exemption.

Customers are reminded that the new amended article 106 §2 grants exemption, as of 1 January 2013, to foreign pension funds only.

To benefit from the exemption, the paying agent must be in possession of tax certification in which the final beneficiary or his agent has certified all the conditions listed in article 117 §2 of the Belgian Royal Decree.

These conditions are the following:

• The beneficiary is the owner or usufruct of the stocks or shares.
• The non-resident investor meets the criteria mentioned in article 106 §2:
  
  
  • Its corporate purpose consists exclusively in the management and placement of funds collected for the purpose of financing legal or complementary pension schemes and that its sole and exclusive activities are limited to the operations listed within article 182, 2°, of the Belgian Tax Code.
    
  • The beneficiary is exempted from any kind of tax on incomes in its country of residence.

The beneficiary is not obliged to redistribute the revenues to a final beneficiary that is not entitled to the exemption aimed at in article 106 §2.

The new template of Form 26 published on our website at the beginning of this year includes already the required wording. Therefore, the publication of the Circular has no further impacts on our current procedure.