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Monday, 17 July 2023

New double taxation treaty between Belgium and the Netherlands - implications for individual investors

Bart De Cock

Bart De Cock


The double taxation treaty between Belgium and the Netherlands, signed on 21 June 2023, will result in certain changes for private investors. The main concerns are the impact on the annual tax on securities accounts, the withholding tax on interest and dividends and the taxation of capital gains.

Impact on JTER

Unlike the current treaty, the scope of the new treaty will be limited to income taxes. It will therefore not (any longer) cover wealth taxes. In particular, this has an impact on the liability for Dutch residents of the annual 0.15% tax on securities accounts, known as the 'JTER'.

The Belgian tax authorities consider that the JTER qualifies as a wealth tax within the meaning of the double taxation treaties. The current treaty with the Netherlands provides that only the state of residence of a taxpayer may levy such a wealth tax. This currently means, for example, that a Dutch tax resident who holds a securities account with a Belgian bank does not have to pay the Belgian JTER. The tax authorities confirm this. However, this position will be different under the new treaty. The Dutch resident will no longer be able to invoke the double taxation treaty to avoid having to pay the JTER on his Belgian securities account.

Withholding tax and income from capital gains

As far as private investors are concerned, nothing will change in terms of withholding tax on dividends. The withholding tax on dividends can still amount to a maximum of 15% in the source state. Following the Protocol to the treaty, this rule also applies to (lump-sum) benefits granted by a tax exempt investment institution. The parties to the treaty therefore seem to qualify these benefits as dividends.

Withholding tax on interest will be completely abolished in future. Under the current treaty, a maximum withholding tax of 10% is still permitted.

Capital gains following the disposal of movable assets (e.g. shares) are still only taxable in the taxpayer's state of residence. However, when a Dutch resident moves to Belgium, the Netherlands may, following its domestic law, tax the deferred capital gain on these assets for the period prior to the move. Belgium cannot tax this amount again at a later date. In this situation, a specific arrangement is also foreseen for certain cases concerning withholding tax on subsequent dividend and interest payments for a period of 10 years following (the year of) the move, in case a protective assessment is still open in the Netherlands (see a later newsflash for more information).

Finally, the Protocol to the treaty also clarifies that the income and advantages of a closed fund for joint account (FGR) or a mutual fund (GBF) established in one of the states are allocated to the participants of these funds in proportion to their participation in the fund (fiscal transparency). The same applies to umbrella funds consisting of several closed FGR’s and GBF’s. The funds themselves may claim treaty benefits on behalf of their participants if the participants have not already claimed treaty benefits themselves. A more or less similar provision was already included in Article 25 of the current treaty for "undertakings for collective investment in securities" without legal personality, although there are important differences. For example, the scope of the current treaty is limited to dividends and interest, whereas it is now extended to income from immovable property, royalties and capital gains.


For Dutch investors holding Belgian securities accounts, the new treaty is a bad thing: they will be subject to the JTER and will therefore be subject to additional taxation compared to the current situation. On the other hand, the abolition of a potential withholding tax levy on interest is a good thing.

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Bart De Cock

Bart De Cock

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