Belgium Loses High Court Dispute Over EU Tax Avoidance Rules (2)

Belgium must allow taxpayers deductions for taxes paid by their controlled foreign companies, the European Court of Justice ruled Thursday.

By not implementing Article 8(7) of the EU Anti-Tax Avoidance Directive, which enshrines this requirement, Belgium “failed to fulfill its obligations under that directive,” the court said.

The ruling contradicts Advocate General Juliane Kokott’s nonbinding opinion of May 22, 2025. Kokott concluded Article 8(7) exceeded the directive’s minimum common goal of protecting domestic corporate tax bases against tax avoidance, and Belgium was, therefore, free to choose stronger protection even if it created double taxation risks for legitimate CFC profits.

The ...