The proceedings began on 27 June 2024 when AmFree filed an application with the Belgian Constitutional Court seeking the annulment of the UTPR as implemented in Belgian law by the Act of 19 December 2023, which transposes the EU Pillar Two Directive.

AmFree argued that the UTPR infringes the Belgian Constitution, read in conjunction with the European Convention on Human Rights and the Charter of Fundamental Rights of the European Union, on the following grounds:

  1. A Belgian entity may become liable for Top-up Tax on profits realised by another entity located outside Belgium, over which it has no direct or indirect control and from which it will never receive those profits. As those profits have no real and reasonable connection with the Belgian entity, the UTPR infringes the principle of fiscal territoriality.
  2. The Top-up Tax under the UTPR may be imposed on group entities that have no ownership interest in, and therefore no control over, the low-taxed entity. As a result, such entities may be required to bear tax on profits that they have not realised and will never receive. Moreover, the UTPR is not limited by reference to the group’s direct or indirect ownership interest in the low-taxed entity. A Belgian entity may therefore become liable for Top-up Tax in an amount that could prevent it from earning a reasonable profit, or even jeopardise its continued existence, without any corrective mechanism being available. This infringes the right to property.
  3. Because a Belgian entity may become liable for Top-up Tax on profits realised by other legal entities over which it exercises no control, it may be prevented from freely using the economic, technical and financial resources available to it. In addition, because the entity’s own financial position is not taken into account, the Top-up Tax may exceed its profits, potentially affecting its competitive position, creditworthiness and viability. This infringes the freedom to conduct a business and the general principle of legal certainty.
  4. The UTPR imposes a tax liability on a Belgian entity in respect of undertaxed profits realised by other entities, without considering the Belgian entity’s own financial capacity. It therefore treats entities with materially different financial capacities in the same manner, which is incompatible with the principle of equality and non-discrimination.

Since the Belgian UTPR provisions derive from the EU Pillar Two Directive, the proceedings also raised questions as to the validity of the Directive itself. AmFree therefore requested the Belgian Constitutional Court to refer questions to the Court of Justice of the European Union (CJEU) for a preliminary ruling.

In its judgment of 17 July 2025, the Belgian Constitutional Court accepted that request and referred questions to the CJEU concerning the compatibility - and, by extension, the validity - of the UTPR provisions in the Pillar Two Directive with primary EU law and customary international law. In particular, the CJEU was asked to assess whether the UTPR provisions are compatible with the principles of equality and non-discrimination under Articles 20 and 21 of the EU Charter, the right to property under Article 17 of the EU Charter, the freedom to conduct a business under Articles 15 and 16 of the EU Charter, the freedom of establishment under Article 49 TFEU, the freedom to provide services under Article 56 TFEU, the principle of legal certainty, and the principle of fiscal territoriality as recognised by the CJEU and under customary international law.

On 12 May 2026, however, the Belgian Constitutional Court informed the parties that the proceedings had been reopened. This followed a request from the CJEU asking the Belgian Constitutional Court to clarify whether the Side-by-Side regime, as well as the transitional UTPR Safe Harbour, would affect the Court’s earlier finding that AmFree has a sufficient interest in bringing the action.

After reopening the proceedings and hearing the parties, the Belgian Constitutional Court held that the subsequent developments relating to the Side-by-Side regime and the transitional UTPR Safe Harbour do not remove AmFree’s interest in obtaining a ruling on the validity of the Belgian UTPR provisions. The Court noted that Belgium has not yet implemented the Side-by-Side regime. In any event, even if that regime were introduced into Belgian law, it would only apply where the ultimate parent entity is located in a jurisdiction that has adopted a qualified Side-by-Side regime, such as the United States (US). A Belgian subsidiary of a US group would therefore not benefit from that regime if its ultimate parent entity is established elsewhere and could, as a result, still become subject to the UTPR. The UTPR may therefore still affect the interests of US companies represented by AmFree.

The preliminary ruling proceedings before the CJEU may now resume, enabling this Court to address the substantive EU-law questions raised and to provide guidance on the legal boundaries of a key component of the Pillar Two framework.

We are proud that Loyens & Loeff, in collaboration with Jones Day, assists AmFree in this landmark case.

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