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The Belgian Ruling Commission took recently position on the
application of the Belgian participation exemption regime to income
from a Luxembourg SICAR. The Ruling Commission considered that the
SICAR qualifies as Investment Company under Belgian law and that
dividends and capital gains from the SICAR could be exempt in
Belgium.
Background
Several Belgian investors (resident companies and individuals)
intended to establish a Luxembourg SICAR. Based on the Belgian
participation exemption regime, in case of an investment in a
so-called "investment company", the Belgian exemption
only applies if at least 90% of the profits are distributed and if
these profits are taxed in the source state at a rate of at least
15%.
Position of the Belgian Ruling Commission
The Ruling Commission analysed these conditions based on the
SICAR regime and came to the conclusion that:
the SICAR qualifies as an "investment company" in the
case at hand;
dividends received by Belgian resident Companies from the
Luxembourg SICAR can be exempt in Belgium;
capital gains realized by Belgian resident Companies on a share
buy-back from the Luxembourg SICAR can also be exempt in
Belgium;
dividends received by Belgian resident individuals from the
investment in the Luxembourg SICAR qualify for the application of
the reduced withholding tax (roerende voorheffing) of 15% (standard
rate is 25%) and the anti-abuse provisions do not apply.
Implications
Even though each specific investment made by Belgian residents
in a Luxembourg SICAR will require a careful review prior for the
investors to being comforted that the income out of the SICAR
should be exempt in Belgian, the position recently taken by the
Belgian ruling commission is very good news and makes the SICAR a
very attractive investment vehicle for Belgian investors:
SICARs are subject to tax on their income as any Luxembourg
resident company, but they benefit from an exemption from corporate
income and municipal business tax on income from transferable
securities (valeurs mobiličres) as well as on income from
the sale, contribution or liquidation of these assets. This mainly
includes dividends, interest and capital gains. SICARs are also
exempt from withholding tax on dividend distributions to Belgian
investors.
SICARs are regulated investment vehicles and thus subject to the
control of the Luxembourg supervisory authority of the financial
sector ("CSSF"). For more information on the SICAR, you
can refer to our SICAR Brochure and/or contact our SICAR team: http://www.atoz.lu/IMG/pdf/ATOZ_034_Brochure_SICAR_BD.pdf
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The recent developments in the shores of Cyprus have attracted the attention of foreign governments, leading energy companies and naturally the attention of international media.
It is significant that during his recent visit to Antigua, Mr. Augustin Carstens, Deputy Director, International Monetary Fund stressed, "Clearing longstanding arrears would go a long way toward normalising - and facilitating access to - regular financing. This will also help private investment and spur growth".
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The Mauritius Legislature has modernised the legal framework
that governs the non-banking financial services sector on the
island by introducing three new pieces of legislation, and
repealing five pieces of legislation that had become
outdated.
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