The European Commission requests Belgium to amend its rules on the notional interest deduction
The request takes the form of a reasoned opinion which is the second stage of an infringement procedure
The European Commission has officially asked Belgium to amend its legislation on the notional interest deduction. Current Belgian rules provide that a notional interest deduction is granted for Belgian real estate and permanent establishments, while no deduction is granted for foreign real estate and permanent establishments.
It should be noted that the Commission does not challenge the notional interest deduction as such, only its discriminatory application. Notional interest is fictitious interest on own assets. Belgium allows to deduct such interest to take into account the risk of investing own assets in a business activity.
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