Belgium - Tax Authorities Accept Foreign Tax Credit on Certain French Dividends

 In a circular letter dated 27 October 2025, the Belgian tax authorities confirmed that they will follow the Court of Cassation’s case law on the double taxation of French dividends paid to Belgian tax residents. For prior coverage, see BDO’s Tax Authorities Finally Accept Tax Credit on French-Source Dividends.   
 
Belgian tax residents who receive dividends from abroad often face double taxation: a foreign withholding tax is first applied on the payment and Belgium then levies a 30% withholding tax on the net amount. Because the Belgian withholding tax is considered liberating, these dividends are not required to be reported in the recipient’s Belgian personal income tax return.
 
Under the current Belgium-France double tax treaty, relief is available in the form of a minimum 15% foreign tax credit (the “FBB” -- forfaitair gedeelte van de buitenlandse belasting or “QFIE” -- quotité forfaitaire d'impôt étranger).
 
Until now, the Belgian tax authorities only accepted the foreign tax credit when French dividends were reported in the recipient’s Belgian income tax return. The administration insists that only the objection procedure is available in this case. That position limits the time frame for a tax claim to one year from receipt of the tax bill.
 
The new circular aligns the administration with the Court of Cassation, stating that even if the French dividends were not included in the Belgian income tax return because they were subject to the liberating 30% withholding tax, Belgian taxpayers can still claim the foreign tax credit. In those cases, taxpayers can reclaim the excess Belgian withholding tax within a five-year period starting from 1 January of the year of payment of the withholding tax (cf. article 368 CIT 1992). Taxpayers who have reported their French dividends in their income tax return should file a tax claim (within one year following the issuing of the tax assessment notice) if the foreign tax credit has not been applied.
 
The Belgian tax authorities reject ex officio exemption requests on the ground that no double taxation exists -- both when the French dividend has been declared in the income tax return and when the French dividend has not been declared in the income tax return because liberating withholding tax was withheld. The Court of Appeal in Ghent, however, recently ruled differently. Based on article 376, §1 CIT 1992, a request for ex officio exemption in case of double taxation can be filed within a five-year period as of 1 January of the year of receipt of the tax bill and if no final decision has been made regarding a tax claim that was filed. Moreover, the Court of Appeal in Ghent ruled that article 15, §1 and 2 of the Belgium-France double tax treaty should be read in conjunction with article 19.A.1, second paragraph of the treaty. Based on this reading, Belgium should grant a foreign tax credit of a minimum 15% on the net movable income to Belgian tax residents who receive French dividends that were already subject to French source tax, to avoid double taxation.   
 
Note that the tax credit mechanism is not included in the new Belgium-France double tax treaty, which has not entered into force yet. Under the new treaty, French dividends received by Belgian tax residents will be taxed at 30% on the net dividend (i.e. after foreign tax), bringing them into alignment with the tax treatment of dividends from other jurisdictions.