A Royal Decree published 10 March 2016 revises the list of “tax haven” jurisdictions for purposes of the dividends received deduction (DRD). Under Belgian tax law, dividends received from participations in companies that are considered to be located in “tax haven” jurisdictions cannot benefit from the DRD.
A country is defined to be a “tax haven” if: (1) the nominal rate of the corporate income tax is less than 15%; or (2) the effective corporate tax burden is less than 15%. Also, the DRD is not available for countries that are not included on the “tax haven” list if the country does not have a corporate income tax system or does not impose corporate income tax on certain companies.
The March 2016 Royal Decree revises the list of “tax haven” jurisdictions for the first time since 2005. The new list is shorter than the old list, and contains the following countries (countries listed in bold are new on the “tax haven” list): Abu Dhabi, Ajman, Andorra, Bosnia and Herzegovina, Dubai, Gibraltar, Guernsey, Jersey, Kyrgyzstan, Kuwait, Kosovo, Liechtenstein, Macao, Macedonia, Maldives, Isle of Man, Marshall Islands, Micronesia, Moldova, Monaco, Montenegro, Oman, Uzbekistan, Paraguay, Qatar, Ras al Khaimah, Serbia, Sharjah, East Timor, Turkmenistan, and Umm al Quaiwain.
Taxpayers are allowed to provide proof that a country is not a tax haven. In such instances, it appears that the tax administration will request proof the nominal rate of corporate tax equals 15% or more and that the effective tax rate equals 15% or more.
The Royal Decree is applicable for dividends allowed/attributed as from 1 January 2016. As an exception to this rule, for accounting periods ending before 1 April 2016, taxpayers can still rely on the prior tax haven list.
Read a March 2016 report prepared by the KPMG member firm in Belgium: New list of tax havens for the purpose of the Dividends Received Deduction
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