Investing in foreign shares, a good idea?
If you cannot rely on the DRD exemption (dividends received deduction) based on the Mother-Sister Directive, it is often fiscally less than optimal to buy foreign shares because you risk double taxation.
If you receive foreign dividends, for example, you first pay a % foreign tax and then Belgian tax on the remaining amount (25% in corporate tax and 30% in personal tax). There has already been a ruling by the Court of Justice of the European Union that this is not a violation of the free movement of capital. In the Kerckhaert judgment, the Court added that this is a matter for the Member States and that the European Union cannot oblige the Member States to eliminate double taxation. More than that, it is not even a question of discrimination.
France
A lot of ink has already been spilled about dividends from France. The interpretation that proper compliance with the double taxation treaty between Belgium and France means that the Administration must offset a "flat foreign tax portion" of at least 15% has been confirmed twice (in 2017 and 2020) by the Court of Cassation. The result is that French dividends are now fiscally interesting after all. The government could now respond with a (negotiated) treaty amendment.
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