Belgian tax on foreign bank interests ‘unlawful’

The EU’s highest court has ruled that Belgium violated European Union rules by granting a tax exemption to savers with money only in domestic bank accounts, reports Bloomberg’s Stephanie Bodoni. Belgium’s argument that the measure is needed “to prevent tax avoidance and evasion in the context of guaranteeing the effectiveness of fiscal supervision cannot be accepted,” the EU Court of Justice in Luxembourg ruled today. The European Commission, the EU’s executive agency, sued Belgium in 2010, saying the tax measure could discourage Belgian residents from going to banks established outside the country “as the interest paid by such banks cannot benefit from a tax exemption applicable only to interest paid by Belgian banks.” Belgian Finance minister Koen Geens “has taken note of” and “is examining the ruling,” said Davine Dujardin, his spokeswoman.