Brussels, 05/07/2013 (Agence Europe) - With its ruling on Thursday 4 July (C-350/11), the Court of Justice of the European Union ruled the Belgian “notional interest” tax regime as discriminatory in relation to Article 49 of the TFEU (freedom of establishment), as it does not allow account to be taken in the tax advantage procured by the scheme for companies established in Belgium the net value of the assets of a subsidiary established in another member state. The Belgian system allows companies set up in Belgium to deduct from their taxable base the so-called “notional interests” that are to remunerate shareholders that have contributed own funds to that company. It nonetheless excludes from the deduction own funds invested in “stable foreign establishments” (or subsidiaries) or in stakes held in Belgian subsidiaries or foreign subsidiaries that generate “definitively taxed” revenue (subject to common taxation in Belgium), and foreign real estate. The Belgian bank, Argenta, which has a subsidiary in the Netherlands, considered it had been injured by the former restriction. The Court rules that Argenta is right, stating that, by excluding from the calculation of notional interests the own funds of a subsidiary of a Belgian company located in another member state having concluded a double tax agreement with Belgium, the Belgian system introduces inequality of treatment between a Belgian company with a “stable establishment” in Belgium and a Belgian company with a “stable establishment” in another member state. This ruling does not bring into question the Belgian system as a whole but the latter should be amended on the point ruled against by the Court. (FG/transl.jl)