Belgiium eliminated withholding taxes on dividends paid by Belgian subsidiaries to shareholders in countries with which it has tax treaties.
The move should help make Belgium more attractive as a venue for offshore holding companies.
Most countries collect withholding taxes at the border when earnings are withdrawn in the form of dividends. Belgium does not collect withholding taxes on dividends paid to parent companies elsewhere in the European Union. It has now extended the same exemption to parent companies in other countries, like the United States, that have tax treaties with Belgium.
The parent company must be at least a 15% shareholder (10% starting in 2009) and have held its shares for an uninterrupted period of at least one year by the time the dividend is paid. The new policy is retroactive to January 1.