Belgium: New withholding tax rates

Effective

1 January 2012

new withholding tax rates apply on Belgian debt securities, VVPRs, SICAVs and SICAFIs as explained below.

Debt securities

With some exceptions (mainly linked to a few specific National Bank of Belgium (“NBB”) eligible ISINs for which the current rates of 15% and 12.5% remain applicable as appropriate), the tax rate applied on interest has been increased from 15% to 21%.

The account of Clearstream Banking¹ at the NBB is an X account, to which tax exemption is applied by default based on the holding restriction in place and upon submission of the One-Time Certificate for Belgian Debt Securities integrated in the NBB X/N System. Thus, the rate increases do not impact these securities.

As a consequence, Belgian debt securities held with Clearstream Banking will be taxed at the following standard rates:

• 0% on NBB-eligible bonds; and
  
• 21% on bonds eligible in Euroclear Settlement for Euronext zone Securities “ESES”, with the possibility to apply for a reduced tax rate through the current procedures².

Strips Verlaagde Voorheffing / Précompte Réduit (“VVPR”)

The advantageous tax rate applied on VVPR strips is reduced from 10% to 4% (such that the actual tax reduction is no longer from 25% to 15% but is from 25% to 21%).

Lower tax rates for beneficial owners eligible for treaty rates or tax exemption according to the Belgian legislation may be obtained through the current procedures².

SICAVs and SICAFIs

In general, the standard tax rate applied on SICAVs and SICAFIs has been increased from 15% to 21%. Exceptions are the SICAFIs Serviceflats Invest, Home Invest and Aedifica, for which the tax rate applied before 1 January 2012 remains unchanged until further notice.

Tax on conversion of physical deposits into dematerialised or nominative form

The increased rates included in the 2012 State Budget approved by the Belgian Parliament, and the impacts explained in our Announcement , dated 16 December 2011, remain applicable.

Further information

For further information, please contact the Clearstream Banking¹ Tax Help Desk on:

or Clearstream Banking Customer Service or your Relationship Officer.

1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in the Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and Clearstream Banking, société anonyme, registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).
2. As described in our Market Taxation Guide – Belgium.