Brussels, 08/01/2007 (Agence Europe) - The European Commission has decided to take action against Belgium at the EU Court of Justice concerning two taxation matters, and to send it a reasoned opinion for a third case also relating to taxation.
Taxation of income from foreign sources. Belgium is to explain before the Court why it discriminates against Belgian residents with both Belgian and foreign income. Belgian legislation does not allow such residents to benefit from a full deduction of personal and family allowances. Basing its decision on the De Groot ruling of December 2002 (C-385/00), the Commission considers that this limited deduction of personal and family allowances is contrary to the EC Treaty. In reply to a reasoned opinion of 20 July 2006, Belgium acknowledged the infringement but did not indicate when and how it would effectively eliminate it, nor how it would apply EU law in the period before the new rules would enter into force.
Registration tax. When buying a house in the Flemish region of Belgium, citizens previously residing in another Member States (or another Belgian region) cannot have a credit for the registration tax that they had paid on the purchase of a house in their Member State of origin, while residents of Flanders moving house within Flanders do get this kind of credit. The Commission considers this situation is a difference of tax treatment and restricts freedom of establishment. In its reply to an earlier reasoned opinion, Belgium denies the infringement. It is to explain before the Court.
Taxation on housing. People who earn all their income from an activity in Belgium but whose main residence is in another Member State cannot benefit from the same tax reduction for mortgage loans contacted on this main residence as a person residing in Belgium. On the basis of the Schumacker judgement (C-279/93), the Commission considers that the Belgian legislation is in breach of the free movement of workers. Also, the limitation of the tax relief for secondary houses to houses in Belgium dissuades Belgian residents from buying a secondary house outside Belgium. Belgium will be receiving a reasoned opinion. (mb)