New “financial fixed asset” condition

Under Belgian tax law, dividend distributions made by a Belgian taxpayer are in principle subject to Belgian withholding tax (WHT) at the rate of 30%. However, following the Tate & Lyle judgment of the Court of Justice of the EU and subject to certain conditions, Belgium introduced a full exemption of WHT for participations of less than 10% but with an acquisition value of EUR 2.5M held by a foreign company established in the EEA or in a state with which Belgium has concluded an agreement for the avoidance of double taxation including an exchange of information clause.

Article 36 of the Programme Law of 18 July 2025 introduced a new condition for the application of the Tate & Lyle WHT exemption, requiring that the participation has the nature of a “financial fixed asset” in the hands of the dividend recipient.

This new condition applies to dividends distributed by a Belgian company as of 29 July 2025 and is only applicable for dividend recipients which do not qualify as a small company in accordance with the criteria set forth by Belgian company law.

Practical issues for foreign shareholders

The application of the “financial fixed asset” requirement may raise significant interpretational challenges. Foreign shareholders are indeed subject to different accounting standards, which may not align with Belgian accounting principles and concepts.

The parliamentary works of the aforementioned Programme Law explicitly refer to the Belgian accounting interpretation of the concept of “financial fixed assets”. However, assessing a participation against Belgian GAAP concepts and criteria is not straightforward for foreign shareholders and may in practice prove to be highly complex and burdensome.

While both the parliamentary works and the relevant Circular therefore also refer to the Accounting Directive 2013/34/EU of 26 June 2013 and IFRS 10, these references do not fully eliminate the existing legal uncertainty. In particular, they do not clearly establish whether these foreign accounting standards can serve as an equivalent reference framework, thereby eliminating the need for an assessment under Belgian GAAP criteria.

The key question remains therefore whether it is sufficient for a foreign shareholder to demonstrate that the participation qualifies as a financial fixed asset under its own applicable accounting framework and is recorded as such in its financial statements. Requiring foreign shareholders to reassess their participation under Belgian GAAP standards would in many cases impose a disproportionate and, in many cases, unworkable burden.

Minister of Finance: guidance for foreign shareholders 

In order to address the issue outlined above, the Minister of Finance has provided additional clarification on the application of this new condition in an international context.

In his published response to the parliamentary question dated 25 March 2026, the Minister confirmed that, for the purposes of the Tate & Lyle WHT exemption, a foreign shareholder may rely on the internationally recognised accounting standards it applies.

Concretely, when a foreign corporate shareholder demonstrates that its participation in a Belgian company qualifies as a financial fixed asset – or an equivalent concept – under the internationally recognised accounting standards it applies, such as accounting frameworks based on EU Directive 2013/34, IFRS 10, or equivalent national GAAP systems, including US or UK GAAP, such participation is deemed to have the nature of a financial fixed asset for the purposes of the Tate & Lyle WHT exemption.

In that case, the shareholder may claim the application of the Tate & Lyle WHT exemption, provided that all other statutory conditions are met.

Key takeaway

The parliamentary clarification provides welcome guidance and enhances legal certainty for foreign shareholders. They are not required to reassess their participation under Belgian GAAP, provided that the participation has the nature of a financial fixed asset (or an equivalent concept) under the internationally recognised accounting framework they apply; e.g. IFRS, EU‑based GAAP, US or UK GAAP.

If you would like to discuss the impact of this clarification on existing or future dividend distributions, please contact us.