The European Commission has deemed Belgium’s tax allowance on savings income discriminatory, prompting it to refer the case to the Court of Justice of the European Union (CJEU).
The scheme allows for interest on regulated savings accounts to be tax-exempt up to €1,020 in the current year. However, a withholding tax of 15% is levied on amounts exceeding this.
The system has specific criteria that savings deposits must meet which are highly restrictive and nationally focused, according to the Commission. This makes it practically impossible for foreign savings deposits from within the EU and European Economic Area to meet them.
This results in Belgian taxpayers being exempt only from the income from savings held in Belgian credit institutions, which contradicts the freedom to provide services. The European Court confirmed that Belgian law violated this freedom in preliminary rulings on 8 June 2017 and 27 March 2023.
In July 2023, the commission sent a reasoned opinion to Belgium. According to the commission, the efforts made by Belgian authorities to address this since have been "insufficient".
