EC Savings Directive & Expats
Last year, on July 1, 2005, the EC Savings Directive entered into force.
It regulates tax on interest payments.
“The ultimate aim of the directive is to ensure savings income in the form of interest payments made by a financial institution of one EU Member State to a beneficiary living in another state is subject to taxation in that other state”.
The Directive has quite an impact on “cross border savings”, but the impact as far as expats are concerned remains a bit unclear.
Expats in Belgium in principle benefit from the Special Tax Status for foreign executives, a very beneficial regime. Under this status, expats are fictitiously considered as being Belgian non-residents. It is a fiction, because when one would apply the general rule, these expats would be considered to be Belgian residents. It is no secret that this difference has important consequences as to taxation.
Keeping this in mind, how will this situation be treated in accordance with the provisions of the EC Savings Directive.
Please find below a link to a most interesting article of July 19, 2005, in which two Deloitte tax professionals took the opportunity to discuss this topic.
